"There is plenty of demand in Auckland for property and most people are looking for properties in locations which are relatively central.
"The reality is, given how little space there is left in those areas, to build on any scale they need to be in apartment-style developments."
Apartments were no longer "horrible, ugly boxes" like many previous developments but were often comfortable, attractive places to live which were generally cheaper than stand-alone houses.
According to realtor Barfoot & Thompson, Auckland's average residential sale price rose to a record $700,387 in December.
Apartments are not always bringing that figure down - a penthouse in a set of four boutique flats at 454 Remuera Rd is expected to fetch $6 million.
The work being done by Auckland Council and the Government to free up space for building developments appeared to be paying dividends, Ms O'Sullivan said.
"I think the council [has got] a lot smarter about how it consents these sorts of developments," she said.
Auckland Council is also considering changing height restrictions in some areas through the Unitary Plan, which could make it easier to build apartment buildings.
The Statistics NZ figures were not affected by the restrictions on high-debt mortgage lending introduced in October last year. These will no longer apply to the construction of new housing.
Generation Homes chief executive Kevin Atkinson said the company was on track to build 50 extra houses, worth $25 million, in the next year as a result of the restrictions being lifted for new houses.
