Category: Blog

Property Development Due Diligence – Neighbour Consents

In our previous blog we explored key factors property developers should consider when undertaking pre-purchase due diligence. In this blog, we revisit some of those concepts with a particular focus on neighbour consents and approvals. In our experience, neighbours will object to having a development occur in their back yard. This is not surprising as […]

Property Development Due Diligence

Thorough due diligence is an essential risk mitigation strategy that all purchasers need to undertake before acquiring a property. For developers, it is an opportunity to test a project’s viability and identify key risk items that may impede or prevent a project’s completion. Due diligence should include an investigation of both the physical and ‘paper’ […]

Property development fund flows and sector risk

By now, most property developers will be well aware of the credit crunch sweeping through the development finance sector. With limited funds at their disposal, development finance lenders are allocating funds on a preferential basis with a focus on existing client relationships – at the same time, lending criteria is adjusting. Lower LVR’s and higher […]

Macro forecasts and credit availability

NZ’s largest financial institutions including the RBNZ, Treasury and most major trading banks provide forward guidance on NZ house prices as well as wider-ranging macro forecasts for the housing market. While such predictions make for good reading, they are of limited use when making investment decisions. This is because macro forecasts typically fall into one […]

Insurance and risk mitigation

As a builder or developer, you will know that working in construction means being vulnerable to all kinds of risks, many of which can result in compensation claims or financial loss. The inherently unpredictable and dangerous nature of the work means that you, your employees, sub-contractors, and members of the public are all vulnerable to […]

Navigating a Construction Boom

Property development has been thriving over the past 12 to 24 months. Low interest rates and insatiable demand for housing (from investors and owner-occupiers alike) has spurred one of the most significant construction booms since the 1970s. The industry that was hit hard during the GFC appears to have now fully recovered with a strong […]

Residual Valuation Method – What You Need to Know as a Property Developer

Valuation is a critical skill that all property developers need to learn. Basic principles of valuation are used when putting together a project feasibility, which is the starting point for many developers when assessing the viability of a new project. The resulting feasibility will dictate the price one can pay for the land, based on […]

How Will Rising Interest Rates Impact Real Estate Markets in 2021?

COVID-19 triggered a global economic recession in 2020, and central banks across the globe reacted by slashing interest rates – a standard practice to prop up liquidity and stimulate the economy. More than a year later, regulators are still holding off on hiking the rates back up due to the continued effects of the pandemic. […]

Managing the risks of cost escalation

The Knight Frank Global House Price Index shows that global house prices lifted 7.3 per cent in the year to March 2021, and New Zealand had the second fastest growth globally with a 22.1 per cent increase. Property developers looking to take advantage of the favourable market conditions have ramped up residential building activity with […]

Rates and fees in the Development Finance Lifecycle

Property Finance in New Zealand “What are your rates and fees?” is perhaps the most frequently asked question by clients approaching ASAP property finance specialists for a construction loan. However, many developers do not take the time to consider how these costs are incurred over the life cycle of the property development project. Unless you […]