In Wellington at least (where I live), there are limits on the density of housing that can be built (and height). Recently, the council was going to free up some of these restrictions a bit, but there was a lot of backlash by residents who didn't want the "character" of their neighbourhoods to be affected, so the relaxation in the rules has been a lot less.

Wellington is a bit different in that there is a limit on the amount of empty land in the centre and the neighboroughing regions: it's quite hilly and pinned in geographically, and most of the central regions are fairly built-up already. Some areas (near the CBD) were also built up on reclaimed land from the harbour, and what with earthquakes, that's not great...

“pinned in” - meaning “penned in”? I can see they’d sound the same in a New Zealand accent so just idly wondering

"penned for pinned" is in the Eggcorn database[1] - doesn't look like "pinned for penned" is yet but probably worth a contribution (also see the pen <=> pin dictionary definition in the linked thread.)

[1] http://eggcorns.lascribe.net/forum/viewtopic.php?id=7251

New Zealand has lots of land available. Zoning can be an issue. That said we have very low density housing.

I think compliance costs and times don't help. Neither does our building code. We should allow the use of materials that have been approved in more advanced countries like Germany.

The real cause has been low interest rates. People borrow as much as they can. At sub 2% rates they can borrow a lot and are pushing prices up.

There's a lot of land. New Zealand is about the 2/3rds the size of California. It just has to do with lack of development. About the same size if you include the habitable land / non desert.

I suspect a big part of it is that many people who would have built a new house during the covid years (people are always building) instead changed to buying an existing (since building was reduced/restricted).

And if you build a house you're adding to the housing market (assuming it wasn't a teardown/rebuild) whereas if you buy it's just shuffling existing stock around.