Quiet month for Auckland DIY

Modest September home improvement sales mirror muted housing market — Paymark

Eftpos provider Paymark said home improvement sales were modest in Auckland over September reflecting a softer property market, but were stronger across the rest of the country.

Typically, spending on home improvement picks up in September and then rises to a seasonal peak in December, Paymark said.

A large number of Paymark merchants provide goods intended for the house, ranging from garden centres to hardware stores, from appliance shops to furniture outlets, and from fabric shops to carpet suppliers, it said.

Combined, these merchants transacted $416 million in spending through the Paymark network in September, up $32m from August, representing a modest start to the spring/ summer housing upgrade.

The annual growth of underlying spending through these housingrelated merchants was 3.5 per cent.

Paymark said a big contributor to the modest start this year was the softer Auckland housing market.

Auckland house sales have been fewer this year and dwelling consents growth slower.

“The softer housing market has transferred to slow annual spending growth amongst Auckland/Northland housing-related merchants in recent months,” Paymark said.

Their annual spending growth rate through Paymark was 1.7 per cent in September and has averaged only 0.6 per cent in the past three months.

In the rest of the country, the housing-related merchants have fared better in total.

Their spending growth was 4.8 per cent in September, slightly higher than the average of 4.5 per cent for the past three months.

In other sectors, a noticeable change has been the rapid slowdown in payment growth through accommodation merchants since July — coinciding with the end of the Lions tour.

Annual growth for accommodation merchants was 2.1 per cent in September, down sharply from 8.2 per cent in July and an average 16.9 per cent annual growth rate in the 12 months to June.

Across all sectors, payments through Paymark in September were $4.81 billion.

The annual underlying spending growth rate was a moderate 4.5 per cent.

“The core retail sector maintained their recent trend growth while growth slowed in total amongst automotive and non-retail sector merchants,” it said.

Seasonally adjusted, total underlying spending was unchanged between August and September.

For the quarter ended September, underlying spending increased 0.8 per cent, seasonally adjusted, similar to growth during the June quarter.

Both quarters grew slower than the 1.6 per cent averaged in the previous four quarters. It appears the combination of slower lending growth and higher rent and mortgage bills is continuing to constrain household spending generally at present.

The highest annual spending growth during September was in Wairarapa, with 9.4 per cent growth, followed by Hawke’s Bay (9.0 per cent) and Marlborough (8.3 per cent).

The slowest regions were Southland (down 2.5 per cent), Nelson (up 1.5 per cent), West Coast (up 3 per cent) and Waikato (up 3.1 per cent).