If you are considering property development, you need the right advice from the beginning.

It’s no secret that as of late property development is proving to be very popular, with annual building consents issued breaking records in 2021.  The lack of property supply on the market throughout the country has led to an increase in property prices, and developers are keen to make the most of these market conditions to get their projects started quickly.


If you are looking to complete a property development, banks will usually be looking for experience, and will likely advise you to firstly pre-sell enough of the properties in the development to equal at least the amount of the loan you are applying for, and sometimes more.  They will also likely require a Quantity Surveyor to be appointed throughout the construction process and will also require a hefty amount of supporting documents in order to assess your loan application.


Depending on the number of properties in your development, for the majority of lenders we work with, they will not require pre-sales which means you can begin your project sooner and hold on to any capital gains made throughout the process, then market the properties for sale once complete or nearing completion.  For smaller developments, some lenders will not require a quantity surveyor’s involvement either.


The lenders are mainly interested in who the people are involved with requesting the funding to complete the development, the location, and the security that they will hold for the funding required. As long as the transaction makes sense and has a clear exit strategy, which is usually the sell-down of the properties at the end, then we are keen to consider any proposals.


These lenders will generally lend up to 50% of land only, and 60% - 65% of a registered valuation’s “on completion” value of the build.  It is important to note that this is of the GST exclusive value.  Interest can usually be capitalised (added) to the loan amount, as can the fees associated with providing this funding and will need to fall inside the maximum percentage of lending approved.  Having the costs of funding capitalised can be very useful to improve cash-flow throughout the project, however meeting interest only payments can also be an option.


This is where having an independent Mortgage Adviser can fast-track you on your way to completing your development.  We have access to many non-bank lenders who specialise in development funding, which means we can source the best solution for the specific development, whether it’s for four townhouses or forty townhouses.


If you have a development opportunity that you would like to discuss, we can crunch the numbers with you to establish the likely lending solution and the optimal time to be able to apply for funding.  This could be finance for land banking whilst getting through to resource and building consent, right through to including funding for the build project itself.

Development lending can be complex, and it makes a world of difference if you have a broker who knows what is involved from the outset.  Let Connect Me Mortgages take some stress away, by getting it sorted through us.