In the past year nearly a third of all investment by kiwis went into houses - which is highest level since records began measuring investment levels some 45 years ago.
At the same time, Statistics New Zealand says the share of investment going into plant, machinery and equipment investment is at a 45-year low.
The information is contained in Stats NZ's national accounts (income and expenditure) figures for the year ended March 2017.
The figures show residential building investment made up 32% of total investment in 2017. This is the first time it has been above 30 percent since the series began in 1972.
In contrast, plant, machinery, and equipment investment had its smallest share of overall investment, dropping to 19% in 2017 – to be below 20 percent of total investment for the first time.
"Until 2004, plant, machinery, and equipment was the largest component of investment. While it regained that place in 2009, residential building overtook it in 2013 – the two asset types have followed different trends since then," Stats NZ's national accounts senior manager Gary Dunnet said.
"Many factors influence investment expenditure. We know that construction costs are rising, in particular for residential buildings. Meanwhile the prices for plant, machinery, and equipment haven’t changed much overall – in large part because computers keep getting cheaper.”
Dunnet said the drop in plant, machinery, and equipment’s share of total investment also reflects the changing shape of New Zealand’s economy.
"Investment in software and other intangible assets, which aren’t part of this asset group, is increasing as all sectors of the economy make greater use of these digital tools."
He said the impact of the surge in residential building investment could be seen by looking at the investment share of GDP. At 7.6% in 2017, residential building also had the greatest investment share across the full time series back to 1972.
The picture for business investment – the total of all investment types for all sectors, excluding residential building – was very different. Since dropping as a share of GDP in 2010, from 17.6% to 15.6%, it has shown little movement.
"This shows that investment in fixed assets other than residential building has roughly kept pace with the rest of the economy in recent years. In contrast, residential building continued to make up an ever larger share."