Q1 new home consents rose 14.6% year-on-year, the third consecutive quarterly increase. But the average cost to build has barely moved — remaining well above $3000 per square metre for the third year running.
The number of new homes being consented in New Zealand continued to climb in the first quarter of 2026, according to Statistics NZ data reported by interest.co.nz. A total of 9,373 new dwellings were consented in Q1 — up 14.6 percent from the same quarter last year, and 21.5 percent higher than Q1 2024.
That marks three consecutive quarters of year-on-year growth in consent volumes, which is a meaningful signal about the direction of residential construction activity. The pipeline of new work in the pipeline is expanding, though it remains well below the peak set in Q1 2022, when 12,333 new homes were consented in a single quarter.
What the numbers show
The data covers new residential dwellings — houses, townhouses, and apartments — broken down by estimated build cost per square metre. The average estimated construction cost (excluding land) for dwellings consented in Q1 was $3,229 per square metre. That is up 2.2 percent from $3,159 per sqm in Q1 last year, and down 1.4 percent from the $3,276 recorded in Q1 2024.
The key observation is that build costs have been essentially flat for two years. They crossed the $3,000 per sqm threshold in Q1 2023 and have not fallen back below it since. For a typical new home of 140 square metres — roughly the average size of consents in the current period — the total estimated build cost comes to around $453,000. That compares to $446,310 in Q1 last year and $462,654 in Q1 2024. The movement is marginal in percentage terms.
Construction cost inflation has slowed substantially from the rapid increases seen in 2021-2022, when material costs and labour shortages drove prices upward at pace. The current flatness likely reflects a mix of softer demand for new builds in the higher interest rate environment, some easing in supply chain pressures, and a competitive contracting market as builders compete for fewer large projects.
Regional differences
Build costs vary significantly by region. Otago was the most expensive place to build in Q1, with average estimated costs of $3,875 per sqm — reflecting in part the cost of construction in Queenstown and the surrounding area. Bay of Plenty came second at $3,446 per sqm, followed by Wellington at $3,412, Auckland at $3,270, Waikato at $3,123, and Canterbury at $2,815 per sqm — the only major region below $3,000.
Those differences reflect local labour markets, land constraints, topography, and the type of dwelling being built. Canterbury's lower average partly reflects a higher proportion of standard detached houses relative to the apartment-heavy mix in the larger metro areas.
What it means for the housing picture
More consents flowing through to actual construction helps the supply side of the housing market over the next 12 to 24 months. But the build cost environment matters for whether developers and builders can proceed viably. A sustained period at $3,000-plus per sqm means that the economics of greenfield development in particular remain challenging in many parts of the country, particularly when combined with the cost of land and the time required to get a project through the consent process.
For anyone assessing the cost of building a new home or considering a subdivision development, the current cost environment is a material factor. It is not escalating as it did during 2021-2022, which removes one pressure — but it is not falling either, which means the affordability challenge in the construction sector persists.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.