Breaking down Budget 2026 for the building sector.
WHAT YOU NEED TO KNOW:
- Councils get $400m to unlock housing growth
Local councils will be rewarded for consenting more homes, with funding for infrastructure like roads and pipes, helping enable new developments.
- More construction activity is coming
The Government has committed major funding to hospitals ($680 million), new schools, and classrooms, creating work across the sector.
- Solar and energy upgrades gain traction
$30 million on schools for solar and batteries signals growing demand for clean energy, with opportunities expected for installers and suppliers.
- More social housing in the pipeline and a push for better standard
Funding targeted to support 2,250 new social homes from 2028/9, indicates a boost for future work for residential builders. There is also a strong call for Government to go further by requiring Green Star standards for public buildings and Homestar ratings for affordable homes growing the demand for sustainable building expertise.
- Up to $1.2billion to help businesses ditch gas
A new loan guarantee scheme will make it cheaper for large energy users to switch away from gas, accelerating electrification and creating retrofit and upgrade opportunities.
- Big push on skills and apprenticeships
$69 million expansion of Trades Academies aimed to double apprentice numbers to 20,000 by 2030. ent response is due by 20 June 2026.
How did this year’s Budget land for the building sector? Who, what and where is likely to benefit from a boost when the funds find their way around the country? NZ Green Building Council (NZGBC) Chief Executive, Andrew Eagles took a look at the fine print and shared some of his thoughts on how Budget 2026 lands for Kiwi construction.
Things have been tough for the building and construction sector lately, and we’ve been delving into the Government’s Budget 2026, looking for areas of potential growth and development.
Capital spending on new hospitals and schools is good to see – but these Government buildings should be setting the standards for efficiency and quality.
New schools, hospitals and public buildings will be with us for many decades, so we have asked Government in our 2026 Manifesto to continue the commitment to achieving above -building code standards through maintaining and expanding requirements for Green Star across all new and existing Government buildings. It makes sense. The private sector uses Green Star to help ensure better buildings are delivered that cost less to run. This means less costs for the taxpayer.
We were really happy to see the announcement of $69 million to be spent over the next four years to double the number of secondary school students attending Trades Academies to 20,000 by 2030. The increase starts from 2027.
We are strong supporters of more students taking up apprenticeships in the building and construction sectors - they are the ones building the next generation of healthy, efficient homes and buildings.
The future is about efficient electric buildings. It is really important that these Trade Academies prepare their students for an electric energy efficient future. There are hundreds of thousands of hot water heat pumps, batteries and solar that need to be installed.
Understanding what it takes to build an efficient healthy home and considering what it takes to move all cooking and heating systems to electric in our buildings and homes is crucial. This is a great growth and job opportunity. Let's ensure our tradies are ready!
Our recent 2026 Manifesto outlines a series of practical, affordable actions:
- Updating the Building Code to reflect modern energy standards.
- Cutting red tape to unlock energy-efficient investments.
- Providing clearer information for buyers and renters.
- Supporting uptake of heat pumps, rooftop solar and battery storage.
These are not expensive or radical changes. They are sensible, proven solutions being delivered by most OECD countries. They will save money and strengthen our energy security. Let’s drive them forward.
Gas transition loan guarantee scheme
The most important Budget announcement came earlier in the week, with news of the new loans guarantee scheme to help big gas users move away from using gas.
The Gas Transition Loan Guarantee Scheme initiative is expected to make up to $1.2 billion of bank loans available to businesses to eliminate or reduce their dependency on gas.
The Crown will guarantee 80 per cent of each supported loan in return for banks passing on lower interest rates to borrowers.
It's a great first step and one that we’ve been calling for. Thank you to all our members that support us. Your support helps policies like this happen. Now it’s time to offer similar help to those households who have faced multiple energy price rises recently, some of 20% or more.
Key Budget initiatives in our sector:
Incentives for Growth fund for councils
It’s great to see some support for local councils which are trying to improve housing developments. Councils that consent more homes will be given money out of this $400m fund to help pay for infrastructure such as roads and pipes in new suburbs. It will be interesting to see how this is administered and plays out.
Residential developers building to the Homestar standard reduce infrastructure costs and can improve resilience to climate events. Developers certifying to Homestar can also access lower interest finance from banks and enable home buyers to access lower interest mortgage offers. Here’s an example of a developer saving 30,000 per home.
Capital spending for construction of hospitals and schools
$680m is allocated for hospital capital investment. This is allocated to a 160-bed tower in Whangarei, and redevelopments in Tauranga, Hawkes Bay and Palmerston North.
New spending on solar for schools
This initiative provides funding to the Community Renewable Energy Fund, which is administered by the Energy Efficiency and Conservation Authority (EECA), allowing for a dedicated Solar on Schools grant programme in collaboration with the Ministry of Education.
Government says this new grant will provide schools with “a combination of solar panels and batteries and/or energy management systems that will allow schools across the country to benefit from savings on electricity bills.” This initiative is funded through the ‘Energy Funding Reprioritisation'. It is funded with at $10m per year for two years. The Ministry of Education is also supporting with $10m making the total financial contribution $30m.
This is a great step, but as a country, we will get more done if we enable all NZ families and businesses to take up low interest loans. Then we kick start billions of dollars of economic activity and far greater savings. Our manifesto recommends supporting greater uptake of rooftop solar and batteries through low–or zero-interest loans - kick starting large uptake that can really help drive energy resilience for New Zealand.
Housing Flexible Fund – further investment for social housing and other housing solutions
This initiative provides funding to support the delivery of up to 2,250 social homes and other housing solutions to be delivered over a two-to-three-year period starting from 2028/29.
We have asked Government to continue the commitment to achieving above -building code standards through maintaining and expanding requirements for Green Star across all new and existing Government buildings. When funding the building of affordable homes, it should seek certification to the Homestar standard – this will help ensure affordable bills, energy security and comfortable homes that have reduced moisture and do not overheat.
Resource Management Reform – Planning system implementation
This initiative provides funding to implement the new planning system that will support delivery of housing, clean energy, infrastructure and growth, while maintaining environmental protection.
Funding supports the development and implementation of national instruments; including improved data and analytics (including the development of the New Zealand Flood Map).
Our 2026 manifesto asks political leaders to focus on a simple idea: how to use energy smarter, starting with the places we live and work.
Buildings currently consume nearly a quarter of New Zealand’s electricity and a growing share of gas — much of it just to heat rooms and water.
The manifesto outlines a series of practical, affordable actions:
- Updating the Building Code to reflect modern energy standards.
- Cutting red tape to unlock energy-efficient investments.
- Providing clearer information for buyers and renters.
- Supporting uptake of heat pumps, rooftop solar and battery storage.
These are not expensive or radical changes. They are sensible, proven solutions that will save money and strengthen our energy security.
The NZGBC recently surveyed its 600 members. They said they wanted the NZGBC to be advocating for government action to deliver healthier energy efficient buildings, homes and communities. The NZGBC is delivering and gaining significant advocacy wins such as keeping insulation standards and gaining the gas transition guarantee fund. At the same time, the number of buildings and homes rating to green certified standards continues to climb. There is now $50bn worth of assets green certified homes and buildings in NZ.
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