The Section Price Movement
BRANZ analysis shows section prices have fallen 15 percent — approximately $35,000 — from their mid-2022 peak. In the January-March 2025 quarter, the average price for a section with a new standalone house decreased 4.1 percent to $1,018,000, down $43,000 from the previous quarter. This is meaningful relief for land-side affordability, but it needs to be read alongside the construction cost picture to understand what it means for actual housing affordability.
Statistics New Zealand recorded 2,418 new homes consented in April 2025 — a 17 percent decrease on April 2024, partly explained by the Easter and Anzac Day timing. Over the full year to April 2025, 33,554 new homes were consented, down 5.2 percent on the prior year. The market is softer, but not in freefall.
The Build Cost Reality
The section price relief is substantially offset by construction cost inflation that has not reversed. BRANZ Senior Economist Matt Curtis’s assessment is direct: “A basic 200m² home now costs $777,000 to build” — up from approximately $650,000 in mid-2022, a 20 percent increase versus 12 percent general inflation over the same period. Material costs, wage growth, and sector-wide inflation have driven the increase; neither has reversed to the degree that would close the affordability gap opened by the 2021-2022 construction boom.
The QV CostBuilder quarterly update for August confirms that build cost inflation has normalised — a 0.3 percent increase in the most recent quarter, consistent with the two preceding quarters. This is good news for programme certainty: builders and developers can quote with more confidence that costs will hold than at any point since the pandemic. But stability at a high level is not the same as a return to pre-boom affordability.
The Sector’s Challenges
The construction industry has experienced significant contraction since 2022. Business liquidations were up 37 percent through February 2025. Average house sizes have decreased from 184m² in 2023 to 176m² in 2024 — a market-driven response to cost pressure, with buyers and developers reducing floor areas to keep projects within viable budgets. Standalone house consents rose 5 percent through March 2025, suggesting some recovery in this segment. For contractors, the combination of lower volume, stable costs, and gradually improving confidence provides a cautiously more predictable environment than the volatility of 2022-2023.
