Construction activity is likely to soar this year after the number of building consents issued reached their highest level for seven years in November.
Westpac senior economist Satish Ranchhod said consent issuing had ''retraced'' all the fall which occurred before last year's election, when there was increased uncertainty about the tax treatment of property.
Total residential consent numbers rose 10% in November.
The November figures were boosted by a strong increase in the volatile apartments category.
However, even excluding apartments, consent numbers were up 2.1%, Statistics New Zealand figures showed.
Mr Ranchhod said combined with ongoing reconstruction in Canterbury, conditions were lining up for a year of strong construction spending - particularly in Auckland.
''Today's data comes on top of other favourable indicators for the housing market, including increases in house sales and mortgage approvals, as well as strong population growth.''
There were also signs house price inflation was increasing, he said.
The strong construction outlook was not limited to residential property, with the value of non-residential building consents rising 22% in the year to November.
Strengthening domestic economic conditions were encouraging increases in business investment spending.
Also, there was a significant amount of infrastructure spending planned for the coming year, Mr Ranchhod said.
ASB economist Jane Turner said Auckland accounted for the bulk of apartment consents in November - 442 of the 474 issued nationally.
However, she expressed concern about the trend in Auckland for consents issued - it had remained flat over the past few months.
In late 2012, it was estimated the housing shortfall in Auckland was between 20,000 and 30,000 dwellings.
''While Auckland housing construction has since increased, this has been more than offset by strong net migration into the region. As such, the recent stalling in Auckland house-building demand is a concerning trend.''
The low level of supply relative to growing housing demand suggested ongoing upward pressure on Auckland house prices, she said.
There were no fresh implications for the Reserve Bank from November's data but the housing and construction sector was one the central bank would watch closely over the next few months.
Signs Auckland building activity was stalling, as the Auckland housing market was tightening, was an unwelcome development, Ms Turner said.
In Australia, the number of residential building permits issued rose unexpectedly in November, driven by strong growth in demand for apartments.
Approvals to build or renovate both houses and apartments jumped 7.5% from October, the Australian Bureau of Statistics said.
Economists were expecting a 3% fall in November from October.
Permits to build houses fell by 0.3%, while approvals for apartments, townhouses and other dwellings leapt 16.7%.
In October, approvals overall climbed by 11.5%, rebounding from a 12% slump in September.
The apartments component of the survey is often very volatile.
Record-low interest rates fanned a rise in building approvals through much of last year, encourage investment in new housing construction, needed to support the economy as the mining investment boom slowed.
Interest rates have been at 2.5% in Australia for nearly 18 months as the Reserve Bank of Australia tried to lift economic activity in non-mining sectors.
Australia's economy has slowed in recent quarters, prompting debate among economists the central bank may need to cut rates further to support growth and, in particular, building activity, a big employment generator.
