Quarterly data from the Building Research Association of New Zealand’s (BRANZ) new Build Insights tool show the total average price for a section and a new build stand-alone house is about $1,018,000 – $42,000 less than the $1,060,000 in December last year – but still difficult for investors to stack up as a rental.

And even though mortgage affordability has improved slightly since late 2023/early 2024, as the value of existing houses has fallen, and the Reserve Bank has cut the OCR, servicing a new mortgage is still up from the early stages of the pandemic when interest rates were low.

Although the total price of a section and new house is down $43,000, or 4.1 per cent, on the previous quarter of October–December last year, and section prices are down $35,000, or 15 per cent from their mid-2022 peak, the high cost of building continues to make new builds inaccessible for many.

BRANZ senior economist Matt Curtis says the building sector is still experiencing high costs since the pandemic from a number of factors, including increased material costs, higher wage costs as well as the general inflation across all sectors.

BRANZ estimates that a 500m² section would have cost about $275,000 in mid-2022. The same section would have dropped to about $240,000 in March this year.

There is, however, significant variation in different regions. The average cost of a 500m² section in the Auckland region will be more than $505,000, compared to $65,000 on the West Coast.

The cost to build a new house on a section has increased by nearly 20 per cent since mid-2022, with an average 200m² house costing $777,000 in March 2025.

In October 2023, BNZ estimated the difference in the cost to build versus buy an existing house at $197,000. To March this year, build costs have increased by 7 per cent, whereas the price of existing houses has only increased by 3% - which means the difference is now $201,000.

BRANZ says a driving factor for this is that house build prices have continued to increase in recent years and at nearly twice the rate of inflation.

Latest estimates show that building a basic 200m² home, which would have cost just over $650,000 in mid-2022, will now cost $777,000.

This is nearly a 20% increase over a time when general inflation rose 12%. Existing property prices have increased slightly over the same period.

House sizes getting smaller to adapt to rising costs.

The average size of new standalone houses consented in 2024 was 176m² compared to 184m2 in 2023, BRANZ data show.

Since 2023, building consents for stand-alone houses have increased slightly, whereas consents for attached dwellings have decreased by 16 per cent. There has also been a decline in consent value. The total has fallen by 13 per cent compared to 2023 after adjusting for inflation.

These findings have been drawn from BRANZ’s new data tool BRANZ Build Insights – the first of its kind to bring together reliable economic insights from across the building sector.

Curtis says generally, smaller and simpler houses are a good thing – they cost less to build and are also more cost-effective for people to live in, with less energy and maintenance expenses.

“The data is showing the first signs of improving affordability in the new-build sector and since 2023, the number of building consents issued for standalone homes has been slowly increasing – growing 5 per cent in the year ending March 2025 compared to the previous year. “

He says since 2022, the building and construction industry has faced significant challenges, including a decline in new startups and notable increases in business liquidations – up 37 per cent in the year to February compared to a year earlier.

However, the sector’s skills pipeline shows a more promising outlook. This has been underscored by a surge in trades training, and carpentry apprenticeships have more than doubled in the past decade, with 21,165 apprentices in 2023 compared to 9,280 in 2014.

BRANZ chief executive Claire Falck says Build Insights features data that can help the sector forecast construction demand, track workforce trends and better calculate expected build delivery and consenting times. It’ll also help us understand changes in New Zealanders’ living conditions and the impact of new initiatives across our housing.

“This tool will continue to grow with new reliable data sources being added, allowing a more enriched understanding of the building sector.”

She says pt will also be coupled with regular BRANZ economic reports to give sector-leading updates on the status of the built environment, on a regular basis.