NZ home consents hit three-year high, but Westpac flags a bumpy road ahead
New Zealand's residential construction pipeline has strengthened to its healthiest point in three years, with annual home consents up 19%, even as fresh data shows the recovery losing some momentum month to month.
Stand-alone and multi-unit consents both climb
Stats NZ figures show 39,737 new homes were consented in the year to May 2026, up 19% from the year to May 2025.
Economic indicators spokesperson Michelle Feyen said the annual gain follows a difficult stretch for the sector.
"The annual increase in new home consents followed declines in May for the last three years, and consent numbers remain below the record peak reached in 2022," Feyen said.
Stand-alone houses drove much of the recovery, with 18,271 consented over the year, up 17%. Multi-unit dwellings outpaced that growth, rising 20% to 21,466, led by a 22% jump in townhouses, flats and units — an increase roughly in line with both categories underpinning the overall 19% lift.
Monthly consents pull back after a strong run
Despite the annual strength, Westpac senior economist Satish Ranchhod cautioned against reading the trend as a straight line up. Consent numbers fell 4% in May, unwinding only part of April's 11% surge, and Westpac's own analysis notes it is "close to our forecast for a 5% decline." Even so, Westpac's analysis points to a pipeline that remains solid, with nearly 40,000 dwellings consented over the past year — the highest level since 2023.
Auckland and Canterbury are leading the charge, with consents up 22% and 30% respectively over the year, alongside firmer activity in Southland, Otago, Wellington and Waikato.
Cost pressures cloud the outlook for brokers' clients
But the strength in these regions may be tested by rising costs elsewhere in the build process. QV CostBuilder data shows the average residential building cost per square metre rose 1.6% over the quarter to May and 2.4% annually — with some materials moving far more sharply, including polyethylene pipework up 25% and cedar cladding up 21%.
Ranchhod noted that while easing oil and diesel prices have provided some relief, "other build costs are continuing to rise and momentum in the housing market remains weak" — a dynamic that argues for advisers building extra cost contingency into new-build client conversations through the second half of the year.
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