An economist expects the number of building consents to continue an upward trend over the next year or two.
Statistics New Zealand figures released on Thursday show permits issued rose to 1755 in April, a seasonally adjusted rise of 19% compared with the same month a year ago. The rise was 13% if apartments are excluded.
ANZ senior economist Mark Smith says while the market is recovering, the numbers are still historically low. In Auckland, residential building activity is around a third below historical averages.
Mr Smith says although residential activity is picking up in Auckland there are still housing shortages in the region.
"The council and the Government have identified a fairly marked step-up in terms of residential construction, around 400,000 dwellings over the next 30 years, so that's around 13,000 per annum."
Mr Smith says that's a significant increase on the fewer than 5000 dwellings are built a year at present.
He says more construction resources need to be directed towards Auckland and Canterbury.