Goldman Sachs economist Philip Borkin predicts the recovery in the residential building sector will be gradual, as households repay debt and the Christchurch rebuild slowly gathers pace.
Statistics New Zealand figures released on Tuesday show 1180 building consents were issued in July, up a seasonally-adjusted 13% from June.
When consents for apartments are taken out, consents rose by 6.3% to their highest level since November 2010.
Mr Borkin says the pickup shows the sector may have turned a corner but he points out the improvement is off very low levels and the recovery will be gradual.
He says the fact that households are unwilling to take on extra debt, developers are finding it difficult to raise money and house affordability is still high are all impediments to a rapid recovery.
He says there is nothing in the figures to worry the Reserve Bank, which is more likely to be influenced by what happens internationally.
The value of residential building consents rose 0.5% to $391 million during July while the value of non-residential consents fell 0.7% to $295 million.
The value of earthquake-related building consents in Canterbury continues to rise, reaching $32 million in July, up from $14 million in June.