New home consent figures out from Stats NZ show the building sector clawing back some ground, with 39,737 new homes consented in the year ended May 2026, up 19% on the previous year. It’s the first annual increase after three consecutive years of May declines, though volumes remain below the 2022 peak.
Multi-unit builds accounted for the bulk of the increase, with 21,466 consented over the year, up 20%. Townhouses, flats and units alone rose 22% to 17,230 consents, making up just over half of the entire annual increase. Stand-alone houses rose a more modest 17% to 18,271, while apartments were up 20% and retirement village units grew just 3.4%.
Regionally, Canterbury recorded the strongest growth of any major centre, with 8,468 new home consents over the year, up 30%, ahead of Auckland’s 22% rise to 16,862. On a per capita basis, Canterbury also remains the busiest region in the country for new housing activity, with 12.1 new homes consented per 1,000 residents, well above the national rate of 7.4.
That headline growth, however, sits on top of an industry that’s still shrinking overall. Credit agency Centrix recorded 551 fewer construction firms in business at the end of 2025 than the year before. Roughly half of these companies had been building flats and multi-unit dwellings; the same segment now driving the bulk of the consent rebound.
That overlap is worth watching. Consents measure intentions rather than work done, and take time to convert into activity, which helps explain how firm numbers keep falling even as approvals climb. But it leaves a real question hanging over the recovery. Will the capacity lost over the past two years will be enough to meet demand in the very segment of the market that experienced the greatest contraction?
Centrix managing director Keith McLaughlin doesn’t expect a broader recovery this year, pointing to the upcoming election, higher interest rates and a still-sluggish housing market, though he notes arrears have started to plateau and even ease slightly, a sign firms still trading are managing their debt better.
The dollar figures tell a similar story. Total construction activity fell 4.1% to $55.7 billion in 2025, following a 7.8% drop the year before, with the actual building-work component falling even harder, down 8.2% in 2025 alone. MBIE’s latest National Construction Pipeline Report doesn’t see combined building and infrastructure work recovering to 2023 levels in real terms until 2030.
QV quantity surveyor Martin Bisset says most firms he’s spoken to have little visibility beyond the end of this year, and puts some of that hesitancy down to election uncertainty. He also argues the industry’s stop-start history is partly self-inflicted, pointing to a national infrastructure strategy that exists on paper but has repeatedly been undercut when incoming governments shelve or redesign projects their predecessors had already consented.
That instability has a labour market cost. Construction hiring went from boom to bust through 2024, with enough jobs disappearing that a significant number of workers left for Australia. A turnaround only began in November 2025, and job ads were up 35% in the year to March 2026, running well ahead of the actual construction activity figures, and tracking more closely with the jump in consents than with work being done on the ground.
But the monthly numbers show just how uneven the pipeline still is. May 2026 alone recorded 3,801 new home consents, up 21% year-on-year, yet in seasonally adjusted terms consents actually dropped 4.0% compared with April, a month that had itself jumped 11%. For firms planning workloads and staffing levels, that volatility is proving as significant as the overall growth trend.
Cost pressures aren’t helping. Materials distributor Fletcher Building said in a market update earlier this month that while its manufacturing and distribution volumes had improved, broader cost inflation was already delaying and, in some cases, cancelling new projects, particularly in the commercial sector, a trend it expects to weigh on performance into next year.
Malcolm Fleming, chief executive of New Zealand Certified Builders, says the rebound is genuine but shouldn’t be mistaken for a smooth recovery. Members reported an uptick in contracts and hiring heading into the New Year, but the Iran conflict has since knocked consumer confidence, pushing building material prices up 6 to 10% and prompting some clients to delay or reconsider their builds. That, Fleming says, has “taken a fair amount of wind out of the recovery.”
What’s kept many firms afloat through the volatility, according to Fleming, is adaptability. That might look like pivoting toward renovation work and, in some cases, picking up projects outside their usual scope entirely, including new classrooms and libraries for local schools.
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