New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Building weekly</h2>
<h3>New Zealand</h3>
<ul>
<li><strong>Residential sales activity remains buoyant</strong> (REINZ, Aug): House sales down -9.8% mom, +24.8% yoy (previous +18.7% mom, +28.6% yoy); days to sell in Auckland -9 yoy to 35 (vs. long-term average 35), ex-Auckland -4 to 33 (vs. long-term average 42). House prices +1.9% mom, +10.0% yoy (previous +1.9% mom, +9.2% yoy), with Auckland +9% yoy and ex-Auckland +9% yoy.</li>
<li><strong>Residential rent growth mixed</strong> (Aug.): 3m rolling average rents – Auckland -0.7% yoy, Wellington +1.1% yoy, rest of North Island +5.4% yoy, Canterbury +1.1% yoy, and rest of South Island -6.0% yoy</li>
<li><strong>Closed borders sees net migration negative for first time since 2013</strong>: Net loss of 26 migrants in July -100.4% yoy (previous +341). 12 months to Jul. +76.2k (previous 82.6k)</li>
<li><strong>Westpac no longer predicting a fall in house prices</strong>: Westpac now expect an increase of 3.5% between March and December 2020, and a further annual increase of 8% in 2021. <a href="https://www.westpac.co.nz/assets/Business/Economic-Updates/2020/Monthly-Files-2020/NZ-Home-Truths-September-2020-Westpac-NZ.pdf" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.westpac.co.nz/assets/Business/Economic-Updates/2020/Monthly-Files-2020/NZ-Home-Truths-September-2020-Westpac-NZ.pdf&amp;source=gmail&amp;ust=1600321141084000&amp;usg=AFQjCNG1lytpKCOfxUcRAIqR4E5O3Fhn_Q" rel="noopener">House price forecasts upgraded… again.</a></li>
<li><strong>Fletchers loses dispute with Spotless</strong>: <a href="https://businessdesk.co.nz/index.php/article/property/fletcher-loses-fight-with-commercial-bay-subcontractor" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://businessdesk.co.nz/index.php/article/property/fletcher-loses-fight-with-commercial-bay-subcontractor&amp;source=gmail&amp;ust=1600321141084000&amp;usg=AFQjCNHC0PngvtxqjnzvxksIBkrJtrsD5w" rel="noopener">Fletcher loses fight with Commercial Bay subcontractor</a><span>&nbsp;(behind paywall)</span></li>
</ul>
<h3>Australia</h3>
<ul>
<li><strong>House prices tick down in 2Q, but above still 2019 lows</strong> (ABS capital cities, 2Q20): -1.8% qoq, +6.2% yoy (previous +1.6% qoq, +7.4% yoy) including Sydney +8% yoy, Melbourne +9%, Brisbane +2%, Adelaide +1, and Perth flat.</li>
<li><strong>Stimulus spurs new home sales</strong> (Aug.): Detached dwellings +3.6% mom, +31.5% yoy (previous -10.9% mom, +36.2% yoy). QLD +19.1% mom, NSW +11.7%, WA +11.4%, SA +7.4%, and Vic -14.4% (due to lockdown).</li>
</ul>
<h3>International</h3>
<ul>
<li><strong>China: Construction activity continues to recover</strong> (Aug.): Total building starts -3.6% yoy (previous -4.5%) with residential -4.3% (previous -5.1%), office -5.8% yoy (previous -6.3%) and business buildings -6.4% (previous -9.0%).</li>
</ul>
<p><strong>Chart of the week: Australian Government stimulus underpins robust new home sales (locked down Vic being an exception)</strong></p>
<p>Australian new house sales</p>
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.1&amp;permmsgid=msg-f:1677967739467759017&amp;th=174956c4cf8a7da9&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ8aycpJvBK30-HqL1lcGyxpLUQKWTlOTYnuJMsRBqynwhcghzcHXq2u238YJcyUmVemZBZtmQWMJpSjmYR6L88eNkLFPO8Cv70eiOz8qA_r1zlQlQM--SF9HsI&amp;disp=emb" width="590" height="351" class="editor-image img-responsive" data-image-whitelisted=""></figure>
<p>Source:&nbsp;HIA</p>
<p><strong>Rohan Koreman-Smit</strong>&nbsp;<br>Senior Analyst, Equities</p>
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.2&amp;permmsgid=msg-f:1677967739467759017&amp;th=174956c4cf8a7da9&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ_dmxmXcp1U1YEkSmvp0Cafj2Rp4QeFm8SsKklhPoC_vwYFvDtKfXOF_znlSqm0NhRHNNnYHw_rogujX5QOT0qEnClaDTfhYA_kc-wXiBn4T0gwY4In4BrwT44&amp;disp=emb" class="editor-image img-responsive"></figure>
<p></p>
<p>P: +64 9 368 0085 | TF: 0800 367 227&nbsp;<br>Level 23, Lumley Centre, 88 Shortland Street, Auckland</p>

Building weekly
New Zealand

Residential sales activity remains buoyant (REINZ, Aug): House sales down -9.8% mom, +24.8% yoy (previous +18.7% mom, +28.6% yoy); days to sell in Auckland -9 yoy to 35 (vs. long-term average 35), ex-Auckland -4 to 33 (vs. long-term average 42). House prices +1.9% mom, +10.0% yoy (previous +1.9% mom, +9.2% yoy), with Auckland +9% yoy and ex-Auckland +9% yoy.
Residential rent growth mixed (Aug.): 3m rolling average rents – Auckland -0.7% yoy, Wellington +1.1% yoy, rest of North Island +5.4% yoy, Canterbury +1.1% yoy, and rest of South Island -6.0% yoy
Closed borders sees net migration negative for first time since 2013: Net loss of 26 migrants in July -100.4% yoy (previous +341). 12 months to Jul. +76.2k (previous 82.6k)
Westpac no longer predicting a fall in house prices: Westpac now expect an increase of 3.5% between March and December 2020, and a further annual increase of 8% in 2021. House price forecasts upgraded… again.
Fletchers loses dispute with Spotless: Fletcher loses fight with Commercial Bay subcontractor&nbsp;(behind paywall)

Australia

House prices tick down in 2Q, but above still 2019 lows (ABS capital cities, 2Q20): -1.8% qoq, +6.2% yoy (previous +1.6% qoq, +7.4% yoy) including Sydney +8% yoy, Melbourne +9%, Brisbane +2%, Adelaide +1, and Perth flat.
Stimulus spurs new home sales (Aug.): Detached dwellings +3.6% mom, +31.5% yoy (previous -10.9% mom, +36.2% yoy). QLD +19.1% mom, NSW +11.7%, WA +11.4%, SA +7.4%, and Vic -14.4% (due to lockdown).

International

China: Construction activity continues to recover (Aug.): Total building starts -3.6% yoy (previous -4.5%) with residential -4.3% (previous -5.1%), office -5.8% yoy (previous -6.3%) and business buildings -6.4% (previous -9.0%).

Chart of the week: Australian Government stimulus underpins robust new home sales (locked down Vic being an exception)
Australian new house sales

Source:&nbsp;HIA
Rohan Koreman-Smit&nbsp; Senior Analyst, Equities


P: +64 9 368 0085 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland

Fletcher Building

Building Weekly