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Satish Ranchhod, senior economist at Westpac, notes that the New Zealand’s residential dwelling consent issuance fell by 6.9% in March, following a 1.7% gain in February and a 13% gain in January and leaves annual consent issuance at multi-decade highs.

Key Quotes

“Around 34,500 new dwellings were consented over the past year.”

“Today’s result was close to our forecast for a 5% drop. That follows strong issuance in ‘lumpy’ categories like apartments in previous months, and still leaves a positive trend for consent issuance.”

“Gains in consent issuance continue to be centred on Auckland, where there were just under 13,900 new dwellings consented over the past year – a 24% increase over the previous year. That includes a large number of stand-alone houses, as well as an increasing number of medium density homes.”

“Today’s data, along with firmness in recent months, reinforces our expectations that building activity will take another leg higher over 2019. In fact, the extent of that pick up could be even larger than we had been factoring in.”

“However, we continue to expect that the building cycle will peak over 2019/20.”

“While the level of construction is likely to remain strong for some time, beyond this year we don’t expect a continuation of the large increases that we did in previous years, and some regions are likely to see a moderation in activity.”