Property values help drive car sales

The Kiwi love of new cars, particularly SUVs, has become a big driver behind solid retail sales figures.

Retail sales volumes grew a seasonally adjusted 0.8 per cent in the December quarter versus the previous quarter.

Core retail sales – which exclude cars and fuel – grew by 0.6 per cent, outstripping September’s 0.2 per cent increase.

Motor vehicle and parts retailing sales were strong for most of last year, rising 1.9 per cent in volume and 2.7 per cent by value in December.

People were splashing out, Statistics NZ business indicators manager Tehseen Islam said. ‘‘More expensive cars and SUV vehicles are selling well, especially in Auckland.’’

Strong migration is thought to behind the rise in car sales, with passenger vehicle registrations up 11 per cent last year.

Another factor is thought to be the wealth effect of the hot housing market, a trend which was also reflected in housing-related sales.

Furniture and whiteware sales grew 3.6 per cent, while hardware and building supplies were up 1.3 per cent and electrical goods rose 2.0 per cent.

Matthew Carman, a principal dealer at Capital City Motors in Wellington, said SUVs or sports utility vehicles had indeed become the vehicle of choice for many people.

Historically, they had been a trucklike vehicle but they had become more car-like and people liked their versatility.

‘‘The reason why is the height of the seats,’’ he said, a feature particularly appreciated by elderly people.

Young mothers also liked them. ‘‘As you’re putting kids into baby seats and getting them out, you’re not leaning down as far and putting so much strain on the back.’’

Small, fuel-efficient cars also remained popular, particularly in the capital, while light commercial vehicles were receiving a boost from the fastgrowing courier and logistics industry.

He estimated Wellington car sales had risen about 15 per cent last year, although it could increase off the city’s recent jump in property values.

Car sales in Auckland were likely higher.

‘‘They’ve got a lot of immigration and housing going on, they’ve got a lot of people with newfound wealth because of the increase in values in their properties and a lot of people are updating their cars.’’

The December quarter brought a boost in pharmaceutical-based spending (up 2.5 per cent), and there was little sign of tourism slowing, with spending on accommodation up 3.5 per cent.

By value, total retail spending was up 1.1 per cent quarter on quarter and 5.0 per cent for the year.

Auckland was the dominant region with more than half the country’s sales revenue, up 1.5 per cent.

But Waikato retailers held onto the top spot for growth, at 3.5 per cent.

Wellington sales were 0.6 per cent higher, despite recent earthquake disruption.