The number of homes being built in Auckland is forecast to rise to an all-time high next year, partly driven by a boom in apartments and townhouses.
The latest National Construction Pipeline Report, released yesterday, predicts residential consents will hit a high of 13,322 homes next year - the highest rate since 2004. The rate of home-building could remain at that level until at least 2022, the report by Branz and Pacifecon said.
Auckland needs at least 13,000 new houses a year, for 30 years, to keep up with demand - up from current building rates of around 9700 homes a year.
The Government's main policy for making housing more affordable is ramping up supply, particularly in Auckland.
Housing Minister Nick Smith said the forecasts for a growth in residential activity were encouraging.
"The scale of this growth is unprecedented and equates to Auckland growing by the equivalent of Whangarei every three years," he said.
But the Labour Party said there was no cause for celebration.
"The projections in the so-called construction pipeline are not worth the paper they are written on," housing spokesman Phil Twyford said.
"They are based on demand projections, not the industry's ability to meet that demand, and don't take into account the many impediments to the industry scaling up."
He said more houses were being built than during the financial crisis, but not enough to keep up with demand.
The new forecasts showed a move towards the construction of multi-unit dwellings.
In the past year, the construction of standalone houses increased slightly, while the construction of apartments, townhouses, flats and units increased significantly. By 2020, half of the consents in Auckland are expected to be for multi-unit dwellings - up from 44 per cent. The report also showed a sharp increase in retirement village units, which now made up 6 per cent of new homes, twice the historic norm.
Building activity is expected to rise in Waikato and the Bay of Plenty.