Domestic price of timber

IBISWorld expects the domestic price of timber to rise by 1.7% in 2025-26, to $134.5. The increase reflects a modest recovery in demand from timber wholesalers and sawmills as residential construction activity begins to stabilise following earlier declines in dwelling consents. Harvested wood volumes remain relatively high, but balanced export demand and firm pulp prices are expected to support a small uplift in domestic pricing. A weaker New Zealand dollar has also contributed to higher local prices by boosting the competitiveness of exports and raising the cost of imported substitutes.

Over the past five years, timber prices have been shaped by volatility in both global and domestic markets. The world price of wood pulp has swung sharply, with China's demand for New Zealand radiata pine providing intermittent support for local exporters. Radiata pine accounts for about 90% of New Zealand's harvested forests, according to the Ministry for Primary Industries, and remains sought after for its consistency and quality. A weaker New Zealand dollar has also bolstered export competitiveness, making imported timber relatively more expensive in the local market. With more than 55% of harvested wood exported, strong offshore demand has often placed a floor under domestic pricing, even as local demand fluctuated.

Domestic conditions have been mixed. Demand from forestry and logging, along with timber wholesaling, has been constrained by cyclical swings in construction activity since the COVID-19 pandemic. A surge in dwelling consents during 2021–22 temporarily boosted domestic demand, but weaker property market conditions and rising interest rates have since dampened building activity. Population growth and elevated property prices have supported underlying long-term demand, but in the short term, these factors have not been enough to prevent a pullback in prices. Overall, IBISWorld estimates the domestic price of timber will increase at a compound annual rate of 1.0% over the five years through 2025-26.