Townhouses lead 21% annual lift as Westpac flags construction headwinds
New Zealand issued consents for 41,268 new homes in the year ended August 2026, up 21% on the previous year and the highest annual total since 2023. Westpac expects the rise to flow through to more home building over the next year. However, it warns of growing headwinds for the sector.
"This is the third consecutive month in which the annual number of new homes consented has exceeded 40,000, returning to levels last seen in 2023," said Michelle Feyen (pictured left), economic indicators spokesperson at Stats NZ, in its latest annual new home consents release.
Townhouses lead the lift
Medium-density housing accounted for much of the growth. Townhouses, flats, and units made up half of the annual increase, with 18,085 consented over the year. Stand-alone house consents rose 21% to 19,096.
On a monthly basis, 3,440 new homes were consented in August, up 12% on August 2025. Seasonally adjusted consents rose 5.6% from July, after a 4.5% fall the month before.
Auckland and Canterbury dominate
The increase was concentrated in two regions. Auckland and Canterbury together accounted for more than 70% of the national lift, according to Stats NZ. In Auckland, stand-alone houses led the increase, while in Canterbury multi-unit homes drove the rise. Fifteen of the 16 regions consented more homes than a year earlier, with the West Coast the only exception.
Satish Ranchhod (pictured right), senior economist at Westpac NZ, said planned building was rising in many other regions too, largely through medium-density projects.
"We expect the rise in consents to support a pickup in home-building activity over the coming year," Ranchhod wrote in Westpac's first impressions of August building consents.
Headwinds ahead
Ranchhod cautioned that the monthly trend was starting to flatten, although at a firm level. He also pointed to rising interest rates, the related softness in the housing market, and higher building costs as challenges for residential construction.
Rates are expected to climb further. ANZ economists forecast three more official cash rate (OCR) rises, taking it to a peak of 3.5% by March 2027, according to ANZ's September 2026 property and OCR outlook.
The Treasury has also downgraded its house price outlook, citing higher interest rates, more new housing supply and slower migration.
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