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

Metro Performance Glass / Equity Bottom-Up

<h2>Building weekly</h2>
<h3><strong>New Zealand</strong></h3>
<ul>
<li><strong>Auckland house sales bounce back to normal</strong> (Barfoot &amp; Thompson; Jun.): Auckland sales up +4% yoy, average/median prices resilient +1.4%/+7.7% yoy.</li>
<li><strong>Residential construction and the housing market “very busy” post lockdown but the pipeline is starting to thin</strong>: “Builders remain very busy, with significant pipelines of work” and “plenty of demand for residential renovations” but “there were a few comments that the pipeline was looking a bit thin further out” with “conversion of enquiries to sales already dropping” and ”some projects are being cancelled but many are wait-and-see”. Low interest rates and easing of LVR restrictions are supporting housing demand with “house and land packages still seen as good value for money.” “Queenstown construction is still flat out but cooling faster than elsewhere.” <a href="https://push.bigtincan.com.au/downloads/697f43aaf6581697c7182ac87283ea8031e7541c92e6a14f0bd07973a5e5aabd" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://push.bigtincan.com.au/downloads/697f43aaf6581697c7182ac87283ea8031e7541c92e6a14f0bd07973a5e5aabd&amp;source=gmail&amp;ust=1594357939173000&amp;usg=AFQjCNHjtmzoS4220mBEv5EreE_vN85R4w" rel="noopener">ANZecdotes</a></li>
<li><strong>Nesting kiwis spur renovation demand</strong>: <a href="https://www.stuff.co.nz/business/122068240/lockdown-spurs-home-improvement-bonanza-for-builders-and-retailers" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.stuff.co.nz/business/122068240/lockdown-spurs-home-improvement-bonanza-for-builders-and-retailers&amp;source=gmail&amp;ust=1594357939173000&amp;usg=AFQjCNFVl8osGpFwaJX-jBqpfPo1uYNfbw" rel="noopener">Lockdown spurs home improvement bonanza for builders and retailers</a></li>
<li><strong>Architects’ activity suggests decline in commercial construction</strong> (2Q20): “The subdued outlook for construction is reflected in architects’ measure of activity in their own office, with a particularly large decline in the commercial construction pipeline expected over the coming year.” <a href="https://nzier.org.nz/media/nziers-qsbo-shows-sharp-fall-in-activity-with-businesses-still-downbeat-quarterly-survey-of-business-opinion-july-2020" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://nzier.org.nz/media/nziers-qsbo-shows-sharp-fall-in-activity-with-businesses-still-downbeat-quarterly-survey-of-business-opinion-july-2020&amp;source=gmail&amp;ust=1594357939173000&amp;usg=AFQjCNFySPL5IkR0oJjSTi7yvCDE9KhRAQ" rel="noopener">NZIER QSBO&nbsp;</a><span>&nbsp;</span></li>
</ul>
<h3>Australia</h3>
<ul>
<li><strong>Approvals lead indicator ticks lower</strong> (Construction finance approvals, May): -3.2% mom, -3.3% yoy (previous +2.9% mom, +1.6% yoy).</li>
<li><strong>Construction activity falling</strong> (Performance of Construction Index, Jun.): 35.5 (previous 24.9; contraction &lt;50&lt;&nbsp; expansion) with apartments 44.8 (previous 21.6), houses 39.6 (previous 20.2), commercial 26.6 (previous 18.1) and engineering 32.1 (previous 23.8).</li>
<li><strong>Knauf looking to divest some of its Australian operations including plasterboard JV</strong>: <a href="https://www.afr.com/street-talk/bank-of-america-clayton-utz-land-knauf-divestment-mandates-20200705-p5594u" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.afr.com/street-talk/bank-of-america-clayton-utz-land-knauf-divestment-mandates-20200705-p5594u&amp;source=gmail&amp;ust=1594357939173000&amp;usg=AFQjCNFb1wcqI4tCamTLSMLGOUus2iZqtQ" rel="noopener">Bank of America, Clayton Utz land Knauf divestment mandates</a></li>
<li><strong>Closed boarders to hit apartment construction</strong>: <a href="https://www.channelnewsasia.com/news/world/covid-19-australia-apartment-binge-looms-jobs-growth-housing-12909168" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.channelnewsasia.com/news/world/covid-19-australia-apartment-binge-looms-jobs-growth-housing-12909168&amp;source=gmail&amp;ust=1594357939173000&amp;usg=AFQjCNHor0v2Tpj5o541hK_XT9GoI9lQFQ" rel="noopener">An end to Australia's apartment binge looms over jobs, growth</a></li>
</ul>
<h3>International</h3>
<ul>
<li><strong>US: Construction proving resilient</strong> (May): residential -3.9% mom, +1.1% yoy (previous -5.0% mom, +5.4% yoy), non-residential -0.9% mom, -0.3% yoy (previous -2.5% mom, +0.1% yoy).</li>
<li><strong>US: New home sales rebound</strong> (May): +16.6% mom, +12.7% yoy (previous -5.2% mom, -12.7% yoy).</li>
<li><strong>US: House prices grind higher</strong> (Apr.): +0.3% mom, +4.0% yoy (previous +0.5% mom, +3.9% yoy).</li>
</ul>
<h3>Chart of the week: Housing inventory remains tight in most regions</h3>
<p>Change in inventory of properties for sale, yoy</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:1671714627384702685&amp;th=17331f98b316f6dd&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ8HSFSpRmwArkyF8WrLtRChP02EcTRuxH9fRxHWLEeHfKqwB5bgrvDOJw5yPG5DuVTeutF96YZMSe3GDDBI_sQq1Yv2mqOO79_Wl_wp9ZslqLhKPhK1aOKxE3U&amp;disp=emb" width="456" height="359" class="editor-image img-responsive" data-image-whitelisted=""></figure>
<p>Source:&nbsp;<a href="http://realestate.co.nz/" target="_blank" data-saferedirecturl="https://www.google.com/url?q=http://Realestate.co.nz&amp;source=gmail&amp;ust=1594357939173000&amp;usg=AFQjCNGVqSLq5f0Bd1Z2L7yUguFnYJnCHA" rel="noopener">Realestate.co.nz</a>, Forsyth Barr analysis</p>
<p><strong>Rohan Koreman-Smit&nbsp;</strong><br>Senior Analyst, Equities<br>Forsyth Barr Limited</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

Auckland house sales bounce back to normal (Barfoot &amp; Thompson; Jun.): Auckland sales up +4% yoy, average/median prices resilient +1.4%/+7.7% yoy.
Residential construction and the housing market “very busy” post lockdown but the pipeline is starting to thin: “Builders remain very busy, with significant pipelines of work” and “plenty of demand for residential renovations” but “there were a few comments that the pipeline was looking a bit thin further out” with “conversion of enquiries to sales already dropping” and ”some projects are being cancelled but many are wait-and-see”. Low interest rates and easing of LVR restrictions are supporting housing demand with “house and land packages still seen as good value for money.” “Queenstown construction is still flat out but cooling faster than elsewhere.” ANZecdotes
Nesting kiwis spur renovation demand: Lockdown spurs home improvement bonanza for builders and retailers
Architects’ activity suggests decline in commercial construction (2Q20): “The subdued outlook for construction is reflected in architects’ measure of activity in their own office, with a particularly large decline in the commercial construction pipeline expected over the coming year.” NZIER QSBO&nbsp;&nbsp;

Australia

Approvals lead indicator ticks lower (Construction finance approvals, May): -3.2% mom, -3.3% yoy (previous +2.9% mom, +1.6% yoy).
Construction activity falling (Performance of Construction Index, Jun.): 35.5 (previous 24.9; contraction &lt;50&lt;&nbsp; expansion) with apartments 44.8 (previous 21.6), houses 39.6 (previous 20.2), commercial 26.6 (previous 18.1) and engineering 32.1 (previous 23.8).
Knauf looking to divest some of its Australian operations including plasterboard JV: Bank of America, Clayton Utz land Knauf divestment mandates
Closed boarders to hit apartment construction: An end to Australia's apartment binge looms over jobs, growth

International

US: Construction proving resilient (May): residential -3.9% mom, +1.1% yoy (previous -5.0% mom, +5.4% yoy), non-residential -0.9% mom, -0.3% yoy (previous -2.5% mom, +0.1% yoy).
US: New home sales rebound (May): +16.6% mom, +12.7% yoy (previous -5.2% mom, -12.7% yoy).
US: House prices grind higher (Apr.): +0.3% mom, +4.0% yoy (previous +0.5% mom, +3.9% yoy).

Chart of the week: Housing inventory remains tight in most regions
Change in inventory of properties for sale, yoy

Source:&nbsp;Realestate.co.nz, Forsyth Barr analysis
Rohan Koreman-Smit&nbsp; Senior Analyst, Equities Forsyth Barr Limited
P: +64 9 368 0085 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland

Metro Performance Glass

Building Weekly