As 2025 comes to an end, this report compares regional housing affordability and situates a slow short-term outlook for the construction sector within the context of a steady growth picture expected over the long term.
Housing affordability
- If households continue repaying at 2023 levels, a standard 30-year mortgage could now be paid off in around 17 and a half years.
- The time it takes to save for a deposit has dropped from 14 years in 2021 to 10 years in 2025.
Urban centres lead the housing affordability gains
- Wellington has seen 64% improvement in mortgage serviceability from late 2023. Compared to a national average of 52%.
- Section prices in Auckland and Wellington have fallen by 16% over the last 12 months. However, sections in the Bay of Plenty region have increased by 23%.
Strong construction pipeline visible
- Economic modelling forecasts a steady increase from $59.9 billion in activity in 2025 to $73.3 billion in 2029.
- This healthy longer-term forecast is supported by a more immediate increase in demand in regional markets and government announcements on infrastructure spending.
Construction costs and labour pressures
- National construction prices have risen by 1% over the past year, while the cost of new house consents, measured in dollars per square metre, has increased by 3.6% since December 2023.
- Although pressures on materials and labour have eased, the outlook of future projects suggests that these pressures could re-emerge.