The Headline Numbers
Statistics New Zealand recorded 34,062 new homes consented in the year to March 2025 — a 3.3 percent decrease on the prior year. The North Island bore the full weight of the decline, recording 23,570 consents — down 7.1 percent. The South Island, by contrast, increased 6.4 percent to reach 10,491 new homes consented. The divergence is not noise; it reflects genuine structural differences in the residential markets of the two islands.
Otago recorded 2,556 new homes consented in the 12 months to March 2025 — the highest annual figure ever recorded for the region. Canterbury and Tasman also contributed to the South Island’s growth. The strength of the Queenstown and Dunedin markets, driven by sustained demand from internal migration, tourism infrastructure investment, and lifestyle purchasers, is producing consent volumes that reflect a region operating at a different point in the economic cycle from Auckland and Wellington.
Internal Migration as a Demand Driver
The consent data tracks a migration pattern that has been building for several years. North Islanders — particularly from Auckland — have been relocating to South Island cities and regions in increasing numbers, drawn by relative affordability, lifestyle, and the expanded remote working options that accelerated during the COVID period. This internal migration shifts housing demand in ways that regional infrastructure — schools, health services, roading — has not always kept pace with.
QV operations manager James Wilson captured the broader market sentiment: “Residential property values continue to bubble up and down slightly from month to month but have been kept virtually motionless as a whole throughout the first quarter of 2025.” The constraint is not demand — there is interest — but caution driven by job market uncertainty and elevated unemployment. “Although interest rates have reduced markedly, buyers are still finding the current economic climate to be a challenge.”
What Recovery Looks Like
Wilson’s outlook for value growth: “When the economy does eventually recover and all the excess stock that is available for sale on the market today is sold, that’s when we will see some more sustained home value growth.” For builders, the South Island’s relative strength provides a more active pipeline than the North Island’s current softness suggests nationally. Contractors with capacity to work across regions — or who are considering where to position capacity through the current quiet period — should weigh the South Island’s sustained activity against the higher barriers to entry and accommodation costs that regional expansion involves.
