The $5.8 billion construction sector is in recovery mode, underpinned by Canterbury post-earthquake rebuilding and a national improvement in demand.

Building consent figures from Statistics NZ yesterday showed Canterbury and Auckland drove the national increase in new houses in September.

Dwelling consent figures rose 7.8 per cent from August to September but are up 22 per cent annually.

The additions and alterations market recovered slightly from a six-year low of $927 million worth of work in the year to September, 2011 to $1 billion in the latest year.


Auckland builder George Levick estimates he has restored about 200 houses and fixed dozens of residential and commercial structures with weathertightness issues.

His renovations and extensions to a large Devonport villa were nearing completion but not without a hitch.

"We struck a lava flow from Mt Cambria when we were digging out the basement," said Levick of Priority One Construction, describing how volcanic rock was dug out then trucked off during a fortnight's tough basement excavation which kicked off when the builders drove a digger on to the sloping site through the back garage wall. Excavating beneath the old house created space for five new rooms.

Christina Leung of ASB said the house-building recovery looked set to continue, underpinned by Canterbury.

"However, recent activity indicators suggest some patchiness in rebuilding, with firms in the construction sector noting weak activity more recently," Leung said.

But the steady gradual improvement in building consents added to confidence that construction activity would pick up over the coming year.

"We expect rebuilding activity will gain further momentum later this year."