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Wellington has plenty of land but many can't afford to build on it

Wednesday, 28 May 2025

While house prices have been slowly dipping, building costs have meant that a new property and newly constructed home was over $200,000 more expensive than a existing home. (file photo)
While house prices have been slowly dipping, building costs have meant that a new property and newly constructed home was over $200,000 more expensive than a existing home. (file photo)

Wellington has sufficient land to build new homes and homes and properties are cheaper ‒ but the high cost of building is putting it out of reach of many.

New data from the Building Research Association of New Zealand (Branz) showed house prices were becoming more affordable, with section prices down 15% ‒ or $35,000 ‒ from their mid-2022 peak.

The quarterly data from January to March this year showed the average price for a new section and a new standalone home was down 4.1% to $1,018,000, which was $43,000 less than the last quarter of 2024.

But it’s still substantially more expensive ‒ $201,000 more ‒ than buying an existing home.

The cost of building a basic home is now $777,000 - up from $650,000 in 2022.
The cost of building a basic home is now $777,000 - up from $650,000 in 2022.

Branz senior economist Matt Curtis said a driving factor was that house build prices had continued to rise at twice the rate of inflation in recent years.

“Latest estimates show that building a basic 200sqm 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.“

He said there were still high build costs since the pandemic with increased material costs and higher wage costs as well as general inflation.

“But this new data is showing us 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% in the year ending March 2025 compared to the year ending March 2024.”

The data also showed an assessment of how much land was available to local authorities to build on.

Of the main centres, Wellington had sufficient land for short, medium and long-term land availability for up to 30 years, as did Auckland and Christchurch.

New build homes were getting smaller to adapt to rising construction costs, BRANZ data shows.
New build homes were getting smaller to adapt to rising construction costs, BRANZ data shows.

However, in the short and medium-term, Hamilton and Tauranga had insufficient land available.

Most other areas did have enough land, with the exception of Rotorua which did not have enough under any time frame.

The size of houses was also changing with house sizes getting smaller to adapt to rising costs.

Curtis said the average size of new standalone houses consented in 2024 was 176m² compared with 184m² in 2023.

“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.”

Branz figures also showed residential consents were up by 0.7%, with new standalone house building consents hitting 15,975 in 12 months ending March 2025, an increase of 5% from the 12 months ending March 2024.

Wellington City was taking only 11 days on average to process building consents - the third lowest in the region behind Kāpiti on six days and Porirua on 10. Upper Hutt had the highest with 16 days while Hutt City was taking 14.