NZ: Choppy building consents data - ANZ

Analysts at ANZ note that New Zealand’s total dwelling consent issuance increased 5.7% m/m in February, driven by multi-dwelling consents.

“The number of dwelling consents increased 5.7% m/m (sa) in February, following flattening in January. This volatility was led entirely by the volatile multi-dwelling component, which we estimate increased 14.6% m/m. Issuance for ‘houses’ increased 2%, following 4.1% growth in January.”

“We believe we are in an environment where issuance will struggle to push much higher. While there is plenty of demand and an upcoming more ‘active’ push from policymakers, supply is being challenged by capacity, capital and cost constraints.”

“Consistent with this, one proxy for cost pressures has increased. The value of consents per square metre is running at 7.2% y/y (3-month average), down from a recent peak of 13% but indicative of construction cost inflation continuing at its current moderate pace of 5.3%.”

“The value of non-residential consents eased again to $607m and is running below historical averages.”