New Zealand’s residential consents fall sharply in November

New Zealand’s total residential consent issuance dropped in November, but this fall seems greatly confined to the Wellington region, noted ANZ in a research report. The number of housing consents dropped 9.2 percent sequentially in November after a revised 2 percent rise in October. Looking through the noise, in three-month annualized terms, the total consent is still at a decent pace of 31k, stated ANZ.

On a regional point of view, it seems that most of the softness in the month was attributable to the Wellington region. The number of Wellington consents is estimated to have dropped 29 percent sequentially in seasonally adjusted terms. In terms of trend, national consent issuance is flattening; however, much caution is required given end-point issues with these types of measures.

A weakening is not quite surprising given the industry is greatly facing capacity and capital constraints. It also shows the weakening in Canterbury given that the residential element of the earthquake rebuild is well progressed, stated ANZ. However, positive trends continue to exist in Auckland, Waikato, regional parts of the nation and even Wellington.

The value of non-residential consents continues to stay robust. Even if the NZD 393 million seasonally adjusted amount is weaker than the earlier month and the weakest since July 2015, issuance is volatile and lumpy. It continues to grow at a sequential pace of 0.5 percent in trend terms. Given the capacity pressures, construction costs continue to increase. The value of consents per square metre is trending higher, growing 8.2 percent year-on-year in November, added ANZ.

At 06:00 GMT the FxWirePro's Hourly Strength Index of New Zealand Dollar was bullish at 94.0104, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -24.5202. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex