Modelling supply-side constraints in the construction sector

We’ve received feedback that our forecasts for new dwelling consents are overly optimistic given capacity pressures. In response to this feedback, we have created a supply-side model to help inform our residential construction forecasts. Our core model is essentially a demand-based one. In most cases, the underlying fundamentals of population growth and interest rates are enough to inform us of what’s to come. But this approach only works if supply can keep up.

Better growth in 2018 to prelude a more challenging next decade

Infometrics’ latest forecasts show the New Zealand economy still has more gas in the tank for 2018, despite the slowdown of the last 12 months and suggestions from some analysts that all the economy’s key drivers have already peaked. Infometrics’ Chief Forecaster Gareth Kiernan points to a buoyant export sector, increased government spending, and the perennial need to build more houses in Auckland as the key components of GDP growth averaging 3.4%pa during 2018 and 2019.

Wellington commercial property could be a nice little income earner

Commercial property is often thought of as a hybrid asset, with total returns generated from its bond-like income earning ability combined with the scope for equity-like capital gains. In Wellington’s case, the earthquake-driven shortage of buildings (particularly offices) is likely to be good for both parts of the returns equation. Income, however, could be the real star.

The Panama Canal: mosquitoes, a soft voice and a big stick

A sense of intrigue prompted David Kennedy to visit Panama City – an oasis of wealth and success in Central America.  He was vaguely aware of its economic and historic importance: it is a metropolis of futuristic skyscrapers, an airline hub, a tax haven, a financial hub, a nexus of global trade, and a United States outpost of sorts.  He knew that all these attributes related, in one way or another, to the Panama Canal.