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ANZ analysts note that for the NZ economy, the number of residential dwelling consents fell 6.9% m/m in March (seasonally adjusted), but the strength in previous months saw consent growth lifting 12.1% in Q1, following a robust 5.8% in Q4.

Key Quotes

“Consents have been volatile of late and the timing of consents to building work put in place can vary. In particular, strength in consents over the quarter was concentrated in volatile multi-unit dwellings. Consented floor area – which better aligns to the volume of residential building work – fell 4.6% in the month, be remained up 8.2% q/q.”

“Previous strength suggests residential investment will remain robust in Q2, and today’s release suggests strength is likely to be carried through to Q3. Overall, issuance suggests some small upside risk to our near term construction activity outlook.”

“While growth in consents has slowed in recent years, consent issuance is running at a high level. Annual consent issuance is running at 34,600, pushing above the previous mid-2000s peak (33,200). Growth in Auckland consents drove the strength, with annual consents up around the 14k mark.”

“Overall, housing demand remains robust, which should be supportive of further construction activity.”