“Over the past 12 months nearly 40,000 new dwellings were consented. That’s the highest level since 2023.”
The lift in planned building work remained heavily centred on Auckland (where consent numbers are up 22% over the past year) and Canterbury (+30%).
However, there had also been firmness in Southland, Otago, Wellington and Waikato.
The rise in planned work had been split across both standalone dwellings and medium-density developments.
Westpac senior economist Satish Ranchhod.
On a per capita basis, Canterbury and Otago continued to record the highest number of new homes consented.
In the year ended May 2026, Canterbury recorded 12.1 new homes consented per 1000 residents, followed by Otago (11.1) and Auckland (9.3), compared with 7.4 nationally.
“There have been questions about how sustained the lift in building activity will be,” Ranchhod said.
“Many of the projects consented will have been in the planning phase for some time. However, increases in building and financing costs after the Middle East war have been casting a long shadow across the building sector.”
Westpac economists had heard anecdotal evidence of some builders experiencing tough trading conditions, he said.
“Some of those pressures are now easing. Most notably, oil and diesel costs have fallen a long way. However, other build costs are continuing to rise, and momentum in the housing market remains weak.”
Westpac would be watching to see if the development pipeline remains strong over the next few months, he said
“If tensions in the Middle East remain contained, we’ll hopefully see confidence in the economy lifting and cost pressures moderating.
“For now, we expect a moderate lift in home building activity over the coming months.”
Meanwhile, non-residential (commercial) consents totalled $8.7 billion, down 4% from the year ended May 2025.
The non-residential building types with the highest values were:
offices, administration and public transport buildings at $1.7b (down 5%)education buildings at $1.3b (up 6.4%)storage buildings at $1.2b (down 5.2%).
The value of commercial building work being consented had continued to track sideways, Ranchhod said.
“Under the surface, the value of planned office and industrial projects remains elevated, while retail developments are more limited.
“Even with easing geopolitical tension, we expect developers and occupiers will be cautious about spending on new space until it’s clear that the economy is back on a firmer footing.”
Liam Dann is business editor-at-large for The New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.
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