The building of Auckland houses and apartments has hit a five-year high.
Auckland Council chief economist Geoff Cooper has released his first newsletter focusing on the housing market, which shows the council issued 28% more building consents in the year to October, compared with the previous year, to reach the highest annual figure since June 2008.
Construction activity was picking up but the city's housing was still unaffordable, Mr Cooper said.
"We've had a long period of muted residential consents following the global financial crisis, in part because of the extent of the financial crisis affecting some of the finance companies that were funding a lot of these projects," he said.
"What this means, essentially, is the market is responding to the price signal now and we've starting to see the activity come through that we perhaps would have expected to come a little bit earlier but it was a little bit delayed because of the extent of that financial crisis."
Rental prices were flat but the demand for houses was much stronger, and migration in Auckland was also starting to pick up, Mr Cooper said.
The city has an estimated housing shortage of between one and two years worth of supply.