Housing Minister Nick Smith agreed that it would be challenging to achieve the full three-year target.
"It's correct that we are going to need to post a strong flow of construction over those winter months to be able to achieve that 17,000 target in year 3," he said.
He said the building industry had now used up all its spare capacity and faced serious constraints with skilled labour, materials and equipment.
"In terms of the supply of tilt slabs for apartment buildings, the sector is so overwhelmed with orders that they have to go outside Auckland to get product delivered for as long out as February next year," he said.
"The stories I'm getting from builders are that once we could get a concrete truck at 24 hours notice, now we have to order it two or three weeks in advance."
He said Auckland Council was also struggling to get staff to process consents and inspect new buildings.
"They have been utilising inspection capacity from other councils in New Zealand, but the truth is that over the last 12 months the building boom that started in Christchurch, and has been going for two or three years now in Auckland, is now also on in the Taurangas, the Hamiltons, it's actually quite broad across the country, so both the council and also the broader sector are finding it more challenging.
"I have been talking to building companies in Whangarei, Hamilton and Tauranga that were doing work in Auckland, but now they have sufficient work in their own areas and it's more economic for them to work there."
The report shows that dwelling consents in the latest summer half year (4799) were 21.4 per cent higher than the same period in the previous summer (3954).
But new sections increased by only 4.7 per cent, from 2477 to 2594. Dr Smith said officials advised that there was "a huge flow of new sections" in April and May, suggesting that the slow growth in the six months to March was due to "processing times".
Labour housing spokesman Phil Twyford said the 9566 dwelling consents issued in the full year to March were still well short of the 13,000 a year needed to keep up with the city's population growth.
He noted that only 1010 dwellings had actually been built so far in the 154 Special Housing Areas (SHAs), where consenting was fast-tracked under the housing accord. The largest numbers were in Flat Bush (175), Hobsonville (169) and Hingaia (168), where many houses have been built outside the accord fast-tracking rules so that they did not have to comply with SHA requirements for a share of affordable housing.
"In the SHAs it appears that there may be even more capital gain than anywhere else, and that's acted as a disincentive to get on with building because the land is increasing in value so rapidly that people have got more to gain by sitting on it or selling it," he said.
Dwelling consents have not yet recovered to the last peak of 12,500 in the year to March 2003. Dr Smith said he believed the building industry could not grow faster than about 20 per cent a year, so it might take another two years to reach the goal of about 13,000 new dwellings a year.
