Category: Development and Construction

New builds are becoming an increasingly attractive option for property investors in New Zealand. With lower deposit requirements, exemptions from Reserve Bank restrictions, and strong demand for modern housing, it’s no surprise they’re gaining momentum again.

At ASAP Finance, as a specialist development lender, we’ve seen a surge in property development funding requests for new projects as both developers and investors move to take advantage of the current landscape. This article explores why new builds are getting attention and how you can leverage the trend.

Why Investors Are Choosing New Builds

The main reason investors are choosing new builds is the ease of securing funding. Lower deposit requirements and exemptions from LVR and DTI restrictions make them particularly attractive.

Under current Reserve Bank of New Zealand (RBNZ) loan-to-value ratio (LVR) rules, investors need a 35% deposit for existing properties. New builds, however, benefit from a carve-out in the BS19 framework which exempts them from both LVR and proposed debt-to-income (DTI) limits. In practice, this means there are no formal restrictions on leverage for new builds. Instead, banks apply their own policies – typically requiring a 10–20% deposit and capping lending at 80–90% LVR.

This carve-out specifically covers construction lending. It applies when a borrower is building a new home, purchasing a newly built home from a developer within six months of completion (often referred to as buying “off the plans”), or purchasing through the Government’s KiwiBuild programme. These situations fall within the exemption, giving lenders greater flexibility and investors more accessible leverage.

Furthermore, banks often provide more favourable incentives for new builds as well. These can include discounted rates (ANZ currently offers 0.60% off fixed and 1.25% off floating under their blueprint to build product), cashbacks of up to 1% from major lenders (ANZ, ASB etc), and green build incentives, including extra discounts and products for energy-efficient homes.

While the era of 1.99% mortgages is gone, new builds continue to benefit from competitive pricing, with floating rates for eligible borrowers around 5% depending on profile.

Where Are the Opportunities?

For property developers focused on the investor market, infill developments , particularly townhouses and terraces in established centres like Auckland, Hamilton, and Christchurch – remain the most in-demand product. Investors are looking for well-located, low-maintenance properties that appeal to tenants and deliver steady yields. This means product selection and design need to be geared towards what investors value most. Key considerations include:

• Transport connectivity – close to arterial routes, motorways, and public transport for commuting tenants
• Tenant appeal – proximity to employment hubs, education providers, and retail amenities
• Design efficiency – practical layouts, low-maintenance materials, and compliance with Healthy Homes standards
• Rental return – balancing build cost against achievable rents in the area
• Market absorption – ensuring supply levels of similar stock are not oversaturating the suburb
• Investor affordability – price points that fit within common investor LVR/deposit requirements
• Exit strategy – stock that can be sold down easily to multiple smaller investors, rather than requiring one large purchaser

Greenfield developments also present opportunities, especially in high-growth corridors like Rolleston, Pokeno, and Silverdale. However, developers need to carefully assess the target audience. Many greenfield subdivisions are driven by owner-occupier demand, which can leave investor stock harder to shift. Identifying which subdivisions have strong rental demand and investor appetite is critical to project viability.

ASAP Finance provides tailored development finance solutions for both infill developments (townhouses, terraces, and multi-unit projects in established urban areas) and greenfield subdivisions (large-scale residential projects in growth corridors). Our solutions include no-pre-sale construction funding, no valuations required, milestone-based drawdowns (no QS appointment needed), GST facilities, and serviced or capitalised interest options.

What to Watch Out For

New builds are not always the best fit for every investor.

• Limit scope for value-add – new builds offer limited potential for adding value through renovations, subdivision, or development. Most of the upside is already captured by the original developer, leaving future capital gains tied largely to broader market growth.
• Risk of oversupply – Large-scale property developments can flood local rental markets, leading to longer vacancy periods and delayed rental income.
• Over-capitalisation – Not every new build works as a rental. Higher-spec homes often deliver poor yields if the additional cost (or higher purchase price for the home) cannot be recovered through higher rents, leaving investors exposed to weaker cash flow.

In all situations, investors should focus on yield, location, and tenant demand rather than glossy brochures or IM’s.

Are New Builds a Good Investment?

They can be – but it depends on your strategy. If your goal is long-term passive returns, low maintenance, and taking advantage of favourable bank lending incentives, new builds are ideal. If your strategy is value-add, renovation-driven, or short-term flipping, then older properties may be more suitable.

Final Thoughts

The market has shifted. With lower deposit requirements, exemptions from LVR/DTI limits, and better bank lending incentives, new builds have once again moved from a niche play to a mainstream strategy for investors.

If you’re a developer looking to meet growing demand ASAP Finance provides flexible lending criteria with no pre-sales, no QS, and no registered valuations required.

Ready to take the next step?

Contact the team at ASAP Finance for fast, flexible funding tailored to new build projects.

At ASAP Finance, New Zealand’s leading non-bank property development lender, we’re reshaping the way developers access capital. With banks retreating from development lending, there’s an urgent need for faster, more flexible funding that aligns with the realities of modern construction. Developers today don’t need outdated hurdles, they need certainty, speed, and practical support.

Why pre-sales no longer make sense

Traditionally, pre-sales were used by lenders as a safeguard to mitigate risk. But in today’s environment, they’ve become a bottleneck—stalling viable developments not because the numbers don’t work, but because the pre-sale burden disrupts momentum and jeopardises funding.
Here’s how pre-sale hurdles can derail your project:

1. Costly delays: Mainstream lenders often require 60% or more of a project’s stock to be pre-sold before releasing any funds. That leaves developers in limbo, waiting months to secure pre-sales before breaking ground, while holding costs rise. Furthermore there is the risk of main contractors potentially walking away or extending programs as a result of commitments made elsewhere.
2. Margin erosion: Chasing pre-sale targets often means discounting to drive early contracts. In effect, you’re sacrificing profit to meet a lender’s comfort level – undermining the commercial return before the first slab is poured.
3. Market timing risk: Pre-selling locks you into today’s prices, not tomorrows. In a rising market, that means lost upside. In a falling one, buyers may stall or renegotiate at settlement, putting your repayment plan and the entire capital stack at risk.

The ASAP Finance approach: No pre-sale barriers

At ASAP Finance, we take a different approach. As a specialist lender focused solely on property development, our lending criteria is targeted towards our clients needs. We assess:

• The strength of your equity contribution
• Your track record and delivery capability
• The robustness of your construction contracts and cost controls
• Sensible exit strategies – beyond just selling off-the-plan

This allows us to fund well-structured developments without pre-sale requirements – so you can move forward faster and finish stronger.

We know that the true risk in development lies in execution, not in how many contracts you’ve signed at the concept stage. And with a growing range of alternative lenders in New Zealand, credible exit strategies now go well beyond traditional bank refinancing. For example: a development of 8 homes with just 2 early sales may be enough to reduce loan exposure, paving the way for a staged sell-down while transitioning to longer-term finance. The refinance market is well and truly alive.

No pre-sales ≠ no sales strategy

To be clear: just because at ASAP Finance we don’t require pre-sales, doesn’t mean you should avoid them altogether. Instead:

• Plan ahead
• Understand your product and market
• Build a sales strategy that supports (not delays) your delivery timeline

In a slow market, having some sales secured before completion is essential for debt reduction on a fully drawn development loan facility. This requires a strategic sales and marketing plan running in parallel with construction – not left until the end.

Timing sales depends on the product. High-end homes, for instance, often sell better once completed and staged. But pursuing a “no pre-sales” strategy adds risk, and should only be considered by experienced developers who understand local demand patterns and buyer behaviour.

As one seasoned developer recently told us, “Sales solve all problems.” While this is not true in absolute terms, there is strong substance the message. Even if a project faces cost overruns or delays, strong sales cover provides reassurance to lenders and buffers your funding position.

Rethink the pre-sale dependency

Pre-sales are a bank requirement – not a development necessity. In fact, in some internationally markets, main banks commonly fund property developments without pre-sales. However dismissing sales entirely is a mistake as discussed. “No pre-sales” funding is not a free pass to ignore your sales pipeline. If your project is viable, you deserve a lender who gets what matters most: execution, experience, and speed.

Why developers choose ASAP Finance

ASAP Finance is New Zealand’s trusted non-bank lender for residential, commercial, and subdivision developments. We fund projects from $500,000 to $50,000,000 with:

• No pre-sales required
• No valuations
• No QS appointment

If your project is stuck waiting on pre-sales, it’s time to talk to a lender that funds differently.

Property development finance. Done fast. Done right.

When we receive a development funding enquiry, the first question we usually get asked is:

“What are your rates and fees?”.

It’s a fair question – but comparing lenders isn’t that simple.

Two lenders may offer similar rates and fees but deliver vastly different client experiences, structure those charges differently, and impose terms and conditions that significantly impact the actual cost of funding.

Beyond that, these differences can materially affect how and when you access your development loan. They also shape the overall borrowing experience and, ultimately, your ability to keep the development moving and bring it to a successful completion. In this blog, we look beyond the headline figures and explore what makes a good term sheet.

Rates and Fees

We’ve talked about pricing in plenty of detail elsewhere, but it’s worth touching revisiting – for many developers, rates and fees are still the first thing they look at when choosing a lender.

The headline numbers, though, rarely tell the full story. Lenders might quote a low interest rate and a small monthly line fee to mask what is a high IRR loan when annualised and combined with the establishment fee. Others may have fixed extension fees irrespective of what the additional required term is, or early repayment fees that only show up when timelines shift or settlements happen ahead of schedule.

Line fees should be carefully considered, particularly in cases where there is no initial cash advance against the land (i.e., the land is unencumbered). If your project is delayed due to unmet pre-drawdown conditions, line fees may still accrue based on the full facility limit. This is an important distinction to – interest is typically only charged on the drawn loan balance, whereas line fees apply regardless of drawdown activity.

That’s why it’s important to look beyond just “what’s the rate” and instead focus on how fees are structured. The true cost of funding comes down to the detail – and how those details line up with the realities of your project.

Terms and Conditions

In our view, the terms and conditions (T&Cs) are equally as important and should be scrutinised in the same manner. While interest rates and fees can be comparable across similar lenders, T&Cs are where differences truly show up – and those differences can make or break a project.

You’ll typically see the T&Cs in the form of:

Conditions precedent (CP): These must be satisfied before the loan is drawn down. They’re the lender’s way of ensuring all key information and requirements are in place before releasing funds. Common CPs for development loans include consents and plans, insurances, KYC and AML documentation, development programs, construction contracts, presale agreements and more.

Ongoing conditions: These must be maintained throughout the loan term. They might include regular reporting such as QS reports to facilitate progress drawdowns, filing of GST returns, submission of council inspection reports and generally ensuring the project adheres to key timelines. Think of these as the operating rules of the loan.

Conditions subsequent (CS): These are obligations that must be met after the loan has been drawn. These are less common and are usually used by lenders as a means to control or mitigate risk. Pre-sale hurdles or targets are the best example of this, along with deadlines for council sign offs or compliance requirements.

Lastly, any CPs that the lender waives during part of the initial settlement process typically fall to become a CS. Note, this is always at the lenders discretion so its best to satisfy CPs in full before the settlement date.

Meeting your obligations as a borrower

In property development the stakes are high and failing to meet a loan condition can have serious consequences: it might delay settlement, delay or prevent progress payments, or even trigger an event of default – giving the lender the right to cancel the facility or demand immediate repayment.

As a developer, ask yourself:

1. Are the conditions reasonable?
2. Can I deliver on what is being asked of me, within the timeframe that is required.

The thought process here needs to be broad and needs to extend to all parties that may be involved in the process.  It’s not just about the loan terms – it’s about execution. For example;

If a lender imposes a post-settlement condition requiring a council sign-off by a certain date, you’ll need to:

• Ensure your contractor prioritises the required work
• Understand what reports or documentation may be needed to support the application to council
• Account for council processing times
• Build in a buffer for delays

Failure to manage these moving parts can result in missed deadlines, breached conditions, and a risk to the project’s success.

Remember, funders place great weight on a borrower doing what they’ve promised to do. Losing the support of your funder can trigger major issues, often requiring a refinance under pressure. As a lender, we regularly receive refinance applications from clients who have run into trouble after failing to meet their stipulated conditions precedent (CPs) or conditions subsequent (CS) from their previous development funder.This highlights the importance of a clean, well-understood term sheet that sets clear and achievable expectations from the outset.

What Makes a Good Term Sheet?

A “good” term sheet is one that enables flexibility, aligns with your development timeline, and limits surprises. It doesn’t mean there are no conditions—it means the conditions are clear, realistic, and manageable. A lender offering simple, transparent terms with minimal red tape can often be a better partner than one offering a cheaper loan but hiding behind layers of complexity.

If you’re looking for development finance and want to work with a lender who values clarity and backs your ability to deliver, get in touch with the team at ASAP Finance.

Property development is a complex process that demands strategic planning, careful risk management, and access to the right funding solutions at every stage. The funding cycle typically consists of four key phases: Pre-Purchase, Consenting, Settlement, and Development. Each phase comes with its own unique challenges and funding considerations. Here, we break down the critical stages of a project and their funding requirements.

(1) Pre-Purchase

During the early stages of a project, most costs are funded through cash equity. At this point, there’s no security to obtain external funding (such as a mortgage), and the risks associated with the project are higher. This stage is about validating the assumptions in your feasibility study.

Your equity should cover two critical areas:

1. Due Diligence: This includes liaising with planners on bulk and location studies or consulting engineers about a site’s infrastructure limitations. Many developers hesitate to spend money on due diligence before going unconditional on a property, but it’s often the best investment you can make. Spending a few thousand dollars upfront to avoid a bad project is a win.
2. Deposit Payment: When declaring the contract unconditional, the agreed deposit—usually 10% of the purchase price—must be paid. This is almost always funded by the developer’s own equity.

(2) Consenting

Consenting typically begins immediately after the contract goes unconditional. Like other pre-development milestones, these costs are generally funded by the developer. Note, these expenses are still considered by funders (along with other consultant costs) when calculating the project’s loan-to-cost ratio at the development stage.

Timing is Key: Aim to complete as much of the consenting process as possible before settling the property. The process can take up to nine months, depending on the complexity of the project and council requirements.

Deferred Settlement Advantage: Securing deferred settlement terms can be highly beneficial. This allows the vendor to carry the financing costs while you navigate the consenting process, reducing the financial strain on your end.

(3) Settlement of Property

The settlement phase is a significant milestone and often the first point where external funding is triggered. Developers typically adopt one of two strategies:

1. Maximising Leverage: Inject minimal equity into the land settlement to preserve capital for other project needs, such as initial enabling works.
2. Reducing Funding Costs: Inject maximum equity (cash) into the land settlement, ensuring the development funder will finance the project (including enabling works) as part of their facility.

Land Settlement Funding: Loan-to-Value Ratios (LVRs) for development land are typically around 60%, reflecting the higher risk compared to completed properties. One of the reasons for this is because land values are particularly sensitive to market fluctuations; for instance, a 10% drop in house prices can result in a 30% decrease in land value.

Strategic Lending Decisions: Low-cost funders, such as banks or “near-bank” lenders, are often used for the land settlement if the site is not consented or shovel-ready. However, if deferred settlement terms are close to the commencement of work, developers may settle directly into a development facility, establishing an early strategic partnership with a development lender and ensuring a smoother project transition.

Development Phase

The development phase involves the largest equity injections, making it the most critical stage of the project. Developers who inject significant equity during settlement often find development funding easier to secure. Those relying on high-leverage land facilities may face additional hurdles, such as:

1. Debt Reduction: Re-settling into a development facility by reducing existing debt.
2. Completing Enabling Works: Reducing the cost-to-complete by finishing initial works, such as ground preparation or drainage.

How Should Equity Be Injected?

As a lender, it’s our preference to fund 100% of the cost-to-complete, reducing any existing lending to unlock the development loan facility. This gives us transparency over how the construction phase of the project is to be funded (and paid for).

However, a development facility might include a refinancing of an existing loan and a cost-to-complete facility that assumes some initial work has already been done. This approach shortens the development program and minimises the period non-bank funding is required; however, it can catch developers out if funding is not obtained in time for the next stage of the project.

Ultimately, the best solution depends on the developer’s experience and ability to manage the project.

What If More Leverage is Needed?

While there’s no substitute for cash equity, the following strategies can help stretch your resources:

• Securing Pre-Sales: Pre-sales validate the project’s price point and provide lenders with a clear exit strategy. This can increase willingness to offer better terms.
• Validating High-Risk Cost Items: Completing initial groundworks or other risky tasks upfront can provide lenders with greater confidence.
• Releasing Value Early: Obtaining freehold titles early can allow you to restructure debt and kick-start portions of the project.
• Staging the Project: Breaking the project into stages reduces overall funding requirements and aligns with traditional funding metrics over time.

Conclusion

The property development funding cycle involves navigating multiple stages, each with unique challenges and requirements. From pre-purchase to project completion, developers must carefully balance equity injection, risk management, and lender expectations. Strategic decisions at each stage can significantly impact the project’s viability and profitability. By understanding the intricacies of the funding cycle and partnering with the right financial institutions, developers can position themselves for success in a competitive market.

For more info, reach out to our Lending Team.

The property development landscape is constantly evolving, and in today’s climate, developers are facing a unique set of challenges that are reshaping the way projects are planned, financed, and executed. From regulatory hurdles to surplus residual stock, understanding these obstacles is crucial for navigating the industry successfully.

After speaking with our clients, we thought we’d provide an update on some of the key challenges developers are currently facing.

Pricing and Affordability

• It’s no myth that perhaps the biggest influence on property prices is interest rates. Rising interest rates have increased loan servicing costs for both owner-occupiers and investors. With higher borrowing costs, purchasers can afford to borrow less, which directly impacts property prices.
• Buyer profiles are shifting. A purchaser who might have considered a $1M property a year ago may now be limited to an $800K budget due to current interest rates.
• This makes the price point of your product one of the most important considerations for today’s buyers. Developers must understand their target market, what’s important to them, and how to deliver value while keeping prices attractive.
• Not all news is bad—all major banks are forecasting further OCR cuts, which should lead to lower mortgage rates and servicing costs.
• Selling remains tough, but a common theme among our clients is that well-designed, well-built, and appropriately priced developments continue to sell—though agents are having to work harder. In contrast, projects with poor design and substandard quality are struggling to attract buyers.

Surplus Stock and Increased Competition

• The past few years of booming development pipelines have led to an oversupply of certain types of stock, making it harder to stand out in the market.
• This increase in stock, give buyers more choice, and comparing one project to another project has never been easier. Developers with generic or poorly positioned projects are facing greater challenges in sell-downs, while those who differentiate their product—through quality, pricing, or design—are still transacting successfully.
• As a property developer, you must have a competitive mind set.  You are competing against other property developers to deliver the best product to market.

Increased Regulatory and Compliance Burdens

Navigating the regulatory environment has become more complex, with councils imposing stricter requirements on developers. Resource consents, zoning changes, and infrastructure contributions have added significant costs and delays to projects.

• Higher Infrastructure Costs – Developers are being asked to contribute more towards infrastructure upgrades, increasing costs at both the local council level and through large utility providers.
• The Utilities Monopoly Problem – Large utility providers, operating without effective competition, continue to issue excessive invoices—only to reduce them when challenged. We’ve seen numerous cases where a utility provider has dramatically overquoted costs, only for a developer to find a much cheaper solution when proactively exploring alternatives.
• Due Diligence is Key – The Auckland Watercare red zone debacle is a prime example of council failures impacting developments. Large-scale infrastructure limitations were imposed with little warning, catching developers off guard. The takeaway? Due diligence is everything. Leave no stone unturned in ensuring your site is developable.
• Consenting Delays Continue to Worsen – Despite improvements in other parts of the development cycle (labour, materials, funding availability), council approval times continue to get worse.
  • Consent processing times remain insanely long.
  • COA, EACC, s224c, and title processing now take up to a month each, adding up to four months of delays.
  • Active engagement with council is critical – developers must push the process along.

The Good News

While these challenges persist, there are plenty of opportunities for well-prepared developers who can adapt to the changing landscape.

• Stability and Predictability in Pricing – The era of sharp price declines appears to be over. Developers who price their product well and focus on quality are still seeing solid demand.
• Lending Conditions Have Loosened – There’s good availability of development funding, with lenders actively looking to allocate capital. This means:
  • Better rates
  • More flexible terms
  • Higher leverage
  • In short, lenders may be willing to lend you more for cheaper.
• It’s a Good Time to Build – With many pipelines slowing down, there’s now surplus capacity in the construction sector. This benefits developers in two key ways:
  • Competitive pricing – With fewer projects in the pipeline, developers have stronger negotiating power.
  • Improved project efficiency – Managing sub-trades is easier, and developers are seeing better program delivery. Contractors are now completing projects on time or even early—a stark contrast to a few years ago when liquidated damages were the industry norm.

 Final Thoughts

Property development is never without its challenges, but developers who are strategic, adaptable, and proactive will continue to find success.

At ASAP Finance, we understand the evolving landscape and provide flexible funding solutions that help developers secure opportunities, navigate market challenges, and keep their projects moving forward.

📞 Contact us today to discuss how we can support your next development – 0800 272 756.

In property development, assembling a team of technical and strategic experts is only part of the equation. While professionals like planners, architects, and contractors lay the groundwork for your project, having a skilled financial and legal team ensures you can navigate the complexities of funding, legalities, and market positioning.

In this continuation, we explore the indispensable roles of Accountants, Lawyers, Real Estate Agents, Valuers, Quantity Surveyors, and Financiers—professionals who provide the financial insight, legal assurance, and market savvy to propel your project to success.

6. Accountant

Accountants are at the heart of your project’s financial structure, guiding you through key decisions that shape your development’s profitability. From determining whether to register for GST to advising on the best legal entity for your project—be it an LLC, LP, or Trust—accountants ensure that your structure aligns with your financial goals while remaining tax-efficient. These decisions need to be made before committing yourself to a particular path, as it can be difficult and costly to unwind once you’ve set things in motion.

By engaging a property-focused accountant early, you can optimise your tax liabilities, protect your profit margins, and ensure that every financial decision supports your overall development strategy.

7. Lawyer

A lawyer is your shield in the complex legal landscape of property development. Their expertise spans reviewing sale and purchase agreements, facilitating settlements, and ensuring that funding agreements from financiers are clear, favourable, and align with your project goals. They also meticulously scrutinise construction contracts and other critical documents to safeguard your interests and protect against potential liabilities.

That said, it’s important to remember that your lawyer is a backstop—not your first line of negotiation. As a developer, it’s critical to develop an understanding of key legal concepts yourself. This enables you to negotiate the best deal upfront, leaving your lawyer to refine and approve it. Ignoring these concepts makes it difficult to structure deals effectively and can lead to missed opportunities.

When it comes to property development, the buck stops with you. Ultimately, all liability rests with you as the developer, so you must take ownership of the process, read every document carefully, and fully understand what you’re committing to before signing.

8. Real Estate Agent

Real estate agents do much more than simply sell properties. They are instrumental in ensuring your development is marketed effectively, priced competitively, and positioned to attract the right buyers. A great agent brings access to an extensive database of potential buyers and can directly promote your property, accelerating sales and boosting market visibility.

Beyond sales, their market insights allow you to refine pricing strategies and meet buyer expectations, ensuring your development achieves maximum profitability while staying competitive.

9. Valuer

Valuers are a critical tool for assessing the current and future market value of your development. For many projects, a valuation report is essential for securing main bank financing. While first-time developers can greatly benefit from having a valuer undertake a report, experienced developers often take this process in-house. As a developer, you should have a deep understanding of your product and price point, enabling you to confidently assess your project’s value.

At ASAP Finance, we simplify this process by eliminating the need for external valuation reports. Instead, we conduct our own internal valuations using our extensive in-house sales data—leveraging insights from delivering over 1,000 houses annually. This approach not only reduces administrative burdens but also allows you to focus on progressing your development with fewer delays, creating a more streamlined and efficient experience from start to finish.

10. Quantity Surveyor (QS)

A Quantity Surveyor is the financial gatekeeper of your construction phase, overseeing labour and material costs to keep your project within budget. Their expertise helps prevent cost overruns while ensuring that resources are sourced efficiently.

At ASAP Finance, we take a milestone-based approach to streamline this process. For every project, we prepare a cost-to-complete schedule that outlines available funds and their release timelines. This scalable system can fund projects with up to 50 houses or more, all without requiring an independent QS. By simplifying cost management, developers can maintain financial clarity and momentum.

11. Financier

A good financier is more than just a source of capital—they are a strategic partner in your project. Building a strong, long-term relationship with a non-bank financier can be the key to unlocking opportunities and getting deals across the line that might otherwise fall through. Unlike traditional banks, where managers frequently change, long-term relationships with non-bank financiers can mean access to more leverage, flexible pricing, and preferred treatment.

Experienced financiers understand the intricacies of property development. They don’t just provide funding—they offer valuable guidance when challenges arise and can facilitate resolutions between contractors, engineers, and other stakeholders. Their insights and support can help keep your project on track and avoid costly delays.

Beyond competitive interest rates, the best financiers offer flexibility in their terms. Waiving pre-sale requirements or removing QS oversight, for example, can accelerate your timelines and reduce costs, giving you more freedom to execute your vision.

At ASAP Finance, we take this approach further by considering the broader picture of your project. With an in-depth understanding of property development, we help you navigate complexities, streamline processes, and unlock opportunities for growth—ensuring that your project reaches its full potential

Summary

In property development, the right financial and strategic team is just as critical as the technical experts who lay the foundation. With accountants, lawyers, agents, valuers, QS professionals, and financiers working together, you create a comprehensive support network that protects your project, maximises returns, and ensures its long-term success.

Whether your project is small or large, partnering with professionals who understand the nuances of property development is key to standing out in a competitive market and achieving sustainable growth.

In property development, the strength of your team can make or break your project. With so many moving parts and regulatory hurdles, it’s essential to assemble a team of experts who bring both technical skills and strategic insight. In this blog, we break down the key professionals you need and how their expertise drives the success of your development.

1. TownPlanner

A town planner is crucial for navigating zoning laws, council regulations, and traffic considerations, ensuring your project aligns with local planning rules. Their job is to balance maximizing development objectives, such as site yield, height limits, and density, with council-driven social outcomes. By aligning with sustainability goals and other local priorities, planners can expedite approvals and avoid costly delays. For instance, in high-density areas, aligning with sustainability guidelines might fast-track the consent process, helping avoid major roadblocks.

2. Architect

An architect transforms your vision into reality, creating a design that balances functionality, aesthetics, and compliance with regulations. Early engagement with contractors during the design phase can help ensure that the plans are practical to implement. By collaborating closely with contractors, architects can make informed decisions about material procurement and availability, preventing future delays. A detailed architectural plan also ensures that contractors have fewer questions during construction, speeding up the process and avoiding council rejections due to missing details.

3. Surveyor

Surveyors play a vital role in property development by establishing accurate property boundaries and conducting topographical surveys for site planning. Their responsibilities range from preparing scheme plans and Land Transfer (LT) plans to handling your s223 and s224c applications. During construction, they manage set-out plans and conduct as-built surveys, ensuring that the project adheres to initial planning and avoiding future boundary disputes. Their precision is essential for keeping project on program and ensuring legal compliance

4. Engineer (Civil, Structural, Geotechnical)

Engineering is multifaceted, and a good engineering firm will provide a full suite of services, from civil engineering to structural and geotechnical work. Engineers are responsible for critical aspects such as earthworks, roading, flood modelling, and site services design. In Auckland, for example, securing an Engineering Plan Approval (EPA) is one of the three crucial approvals (alongside resource and building consent). The EPA ensures that infrastructure like stormwater systems and roads are up to code, safeguarding your development’s longevity and compliance with local requirements.

5. Contractor (Civil and Vertical Construction)

Contractors bring your project to life, handling everything from roadwork and drainage to the vertical construction of buildings. The right contractor ensures the project is delivered on time, within budget, and to specification, minimizing delays and costly rework. Working with experienced contractors who understand the complexities of both civil and vertical construction helps streamline the building process and reduces the likelihood of errors during execution.

Stay Tuned for Part Two

Building the foundations with planners, architects, surveyors, engineers, and contractors is just the start. To bring your development to full fruition, you’ll need a skilled financial and strategic team backing you up. In Part Two, we’ll explore the indispensable roles of Accountants, Lawyers, Real Estate Agents, Valuers, Quantity Surveyors, and Financiers. Each professional adds the financial insight, legal assurance, and market savvy to propel your project to a successful, sustainable finish. Stay tuned!

ASAP Finance are market leaders in providing fast, simple, and effective development finance to builders and developers across New Zealand. Whether you’re tackling a large-scale project or need a tailored funding solution, our expertise will help you succeed. Get in touch with our team today

Drawing from our extensive experience working with leading property developers across New Zealand, we’ve pinpointed the key qualities that set the most successful apart. These traits not only drive the success of individual projects but also help establish a long-standing reputation in the property development industry. In this blog, we’ll delve into what we consider the top 10 most essential qualities.

1. Strategic Vision

A strong strategic vision is fundamental for successful developers. They possess the ability to foresee potential in a property or land that others might overlook. This vision is not just about immediate gains but includes a long-term perspective, ensuring each project fits into a broader business strategy. Considerations range from the nature of the project to size, scale, location, and long-term financial objectives. Our most successful clients have consistently shown that a clear, well-articulated vision is critical in driving a project that exceeds market expectations.

2. Financial Acumen

Understanding the financial landscape is crucial in property development. Developers who excel are those who have mastered financial management, including budgeting, cost estimation, and cash flow management. They have a deep understanding of the various development financing options available to them across the market including main bank, non-bank, and mezzanine finance companies. Key concepts like LVR, LTC, and IRR are well understood, as is the ability to calculate the differences between line fees, establishment fees, and how capitalised interest is applied to a loan (the S-Curve). This financial savvy allows them to secure the best development funding terms and ensure financial viability from start to finish.

3. Regulatory Savvy

Navigating the complex web of regulations is another area that requires a deft hand. The regulatory landscape (including legal) spans zoning laws, consenting processes, building codes, contract law, tax codes, and more. Each stage of the development life cycle is impacted by regulations—whether it’s understanding what you can build or knowing your legal rights and obligations under a sale and purchase agreement, keeping up with evolving regulations is critical to project success. By understanding and adhering to these regulations, experienced developers avoid costly mistakes and ensure smooth project completion.

4. Strong Negotiation Skills

Negotiation is an art, and the best developers are masters at it. Whether negotiating land purchases, construction contracts, or financing terms, these successful developers demonstrate exceptional negotiation skills. They know how to secure favourable deals that benefit their projects while maintaining positive relationships with all parties involved. This ensures that projects are delivered on time and within budget, even in challenging market conditions.

5. Adaptability and Risk Management

The property market is dynamic, and thus the ability to adapt to changes is a hallmark of successful developers. Those who excel understand when to take action and when to hold back. As a developer, the challenge is balancing patience and opportunity, particularly when the market is in flux. Risk management is also paramount—conducting thorough due diligence to identify potential risks early on. In some cases, avoiding risk entirely is the best approach, though this may not always be possible. Our most successful developers are prepared for market fluctuations, such as rising interest rates or cost escalations, and have contingency plans to mitigate these risks. Their adaptability ensures they can handle unexpected challenges and still deliver.

6. Exceptional Project Management

Effective project management is essential. This role, often synonymous with the developer’s work, involves meticulous planning, coordination, and execution of every aspect of a project. Developers ensure timelines are met, budgets adhered to, and stakeholders are kept informed. Strong organizational skills and attention to detail allow for the delivery of even the most complex projects successfully.

7. Innovative Thinking

Innovation is at the heart of property development, so too is the ability to think outside the box. One cannot be afraid to challenge conventional approaches—top developers seek new ways to enhance the design, functionality, and sustainability of their developments. This innovative mindset not only sets their projects apart from the competition but also advances the industry as a whole.

8. Attention to Detail

Success in property development often comes down to the details. This includes meticulously reviewing contracts, architectural plans, and construction progress. The margin for error in property development is extremely small, and unchecked errors can quickly turn into large problems. The most successful know that small details make a big difference.

9. Leadership and Team Coordination

A strong team is essential. The most effective developers excel at building, motivating, and leading teams of experts, including planners, architects, contractors, and financiers. They know that the smartest approach is to bring together the right experts, even if they aren’t the smartest person in the room. This ability to unite stakeholders is crucial for delivering high-quality, on-time projects.

10. Understanding Price vs. Value

Price is what you pay, and value is what you get. Top developers prioritise value; this might mean working with a more expensive contractor or securing a higher-quality lender with a pedigree and reputation. While such decisions may cost more upfront, they can make the difference between failure and success. This long-term view focuses on sustainable success rather than short-term gains.

Conclusion

The path to becoming a top property developer is filled with challenges but cultivating these essential qualities positions developers for long-term success. Our experience with some of New Zealand’s most successful developers shows that those who excel in these areas consistently deliver outstanding results. Whether you’re aspiring to become a developer or looking to refine your skills, focusing on these key attributes will help you navigate the complexities of the property development landscape and achieve your goals. And, of course, a little luck helps—though it’s often true that the hardest workers tend to be the luckiest.

ASAP Finance are market leaders in providing fast, simple, and effective development finance to builders and developers across New Zealand. Whether you’re tackling a large-scale project or need a tailored funding solution, our expertise will help you succeed. Get in touch with our team today

In the complex world of property development finance, securing a loan involves various legal documents that protect both the lender and the borrower. In Part 1, we discussed the initial critical documents, and now we delve deeper into additional security documents that will typically accompany a property development loan.

4. General Security Agreement (GSA)

A General Security Agreement (GSA) grants the lender a security interest over the borrower’s current and future assets, providing comprehensive collateral for the loan. It is the second most critical security after the mortgage, and almost all lenders will require it when providing development finance.

Living up to its name, the GSA is general, securing a broad range of assets and can cover all present and after-acquired property, goods, intangibles, money, and more. GSAs reduce the lender’s risk, ensuring a claim over such assets in case of default.

Once signed, the GSA will give the lender the right to register their security interest on the Personal Property Securities Register (PPSR) and make a claim over the secured property in the event the borrower defaults on the loan. Like a mortgage, charges are registered in an order of priority (1st, 2nd, 3rd ranking, etc.). Most development lenders will require a first-ranking GSA over the borrower, so it is important to know if you have granted a GSA (or the ability to register a charge on the PPSR register) to another lender (or trade supplier, as is often the case).

The simplest way to ensure you can offer a 1st ranking GSA to your development finance partner is to have a clean entity or special purpose vehicle (SPV) set up to specifically undertake your project. If you have a group entity that has other debts, it can be very complicated carving out a 1st ranking charge over the development assets, which as discussed, most lenders will require.

5. Specific Security Agreement (SSA)

A Specific Security Agreement (SSA) provides the lender with a security interest in specific assets rather than a broad range. In development finance, this typically pertains to specific assets or contracts relating to a project such as sale and purchase agreements, pre-sale agreements, construction contracts, construction bonds, etc.

With a hope of not being too reductive, you can expect to see the following:

1. Undertakings from the borrower, which (among other things) prevent the borrower from making changes to the material contract
2. Assignment of all benefits of the underlying agreement to the lender, and
3. The creation of special powers in favor of the lender (such as the ability to enforce its rights under the material contract when an event of default occurs).

Two of the most common SSAs are over pre-sales contracts and construction contracts.

SSA (Pre-Sales)

Securing pre-sales agreements extends beyond ensuring that the lender has a claim on the revenue from these sales. It can include things such as securing the deposits and also preventing the developer from amending or canceling any existing contracts. This ensures that the developer cannot change the risk profile of the transaction without the lender’s permission.

SSA (Construction Contract)

An SSA over a construction contract gives the lender a security interest in the contract’s proceeds and obligations. It ensures that the lender has rights to the project’s completion and any financial benefits arising from the construction contract. Delays or issues in the construction process can affect the value and enforceability of this security, posing risks to the lender.

It is important to remember that lenders make the credit decision based on the information represented to them by the borrower, which includes material contracts entered into by the borrower that are deemed necessary to complete the project. Thus, any changes to these contracts change the shape of the deal (risk), meaning that the lender will need to sign off on these changes.

6. Pre-Sale Undertaking from a Solicitor

A pre-sale undertaking from a solicitor is a legal commitment made by a solicitor to a lender, confirming that

1. the pre-sales they have on file are unconditional (except for titles and CCC);
2. they hold the deposits on trust;
3. they will pay the deposit to the lender without set off or deduction when they are legally able to; and
4. that they will use the sale proceed to repay the loan.

Lenders use pre-sale undertakings to ensure that quality of the presales as represented to them by the borrower is legally correct and true and to ensure that the funds from pre-sales (be it the initial deposit or net sale proceeds) are properly managed and allocated towards repayment of their loan.  Note, the presale undertaking can cover not only existing, but also future presales.

For the borrower, there is little direct risk in this regard, but ensuring a reputable solicitor is chosen is crucial to avoid complications.

7. Deed of Assignment Over Intellectual Property

A Deed of Assignment over intellectual property (IP) assigns the rights of the borrower’s IP to the lender as security for the loan. In property development, this pertains to essential project documents such as resource consents (RC), engineering approvals (EPA), building consents (BC), and other plans and sign-offs you will have, as required to obtain code of compliance and individual freehold titles for your property development.

This ensures that in the event of default, the lender can claim these critical documents to complete the project or sell the project (as a complete package) to recover the outstanding loan amount.

The primary risk for the borrower is the potential loss of control over these essential documents. For the lender, managing these documents can be complex, but they are a crucial part of the credit approval process and underscore the developers ability to complete a project.

Conclusion

You will be relieved to know that lawyers have figured out how to simplify the loan documents, and the GSA, SSAs, and Deed of Assignment are now commonly bundled together into a single document that many refer to as a General Security Deed (or GSD), making it easier for all parties involved.

Understanding these security documents involved in property development lending is crucial for both lenders and borrowers. These documents ensure that loans are secured effectively, protecting the interests of all parties involved.

At ASAP, we prioritize transparent and secure lending practices, enabling our clients to focus on successful property development. If you have a project in need of a finance partner, contact ASAP Finance now!

When it comes to property development funding, securing loans through various legal documents is essential to protect both the lender and the borrower. The type and nature of the documents used can vary depending on the type of loan being provided. At ASAP Finance, we specialize in providing loans for property developments, which requires a bespoke set of documents over and above the traditional term loan agreement that we are all familiar with.

These documents will set out your rights and obligations during the term of the loan, so as a developer, it is critical to understand what each document is. Not only will it help you navigate through the funding process more efficiently, but it may guide and influence your decisions during the project that will help you better manage your relationship with your lender.

In this two part blog series, we’ll explore the key security documents used in our lending practices: the Letter of Offer, Term Loan Agreement, Deed of Guarantee, General Security Agreement, Specific Security Agreement, and the Pre-sale Undertaking from a solicitor. We’ll delve into what each document is, why lenders use it, its functions, and the risks involved.

1. Letter of Offer

A Letter of Offer (LOO) is a preliminary document from the lender to the borrower outlining the basic terms and conditions of the loan before formal security documents are drafted. This document is the first binding document issued by the lender in the funding process and will be issued after terms have been negotiated.

A letter of offer will provide a clear, concise summary of the loan terms, as well as outline conditions precedent (CPs) that need to be satisfied before the lender will settle the loan.
The letter of offer allows the borrower to understand the commitment they are entering into and ensures a mutual understanding of the loan terms before proceeding with the more detailed and legally binding security documents.

Always review the letter of offer in detail; otherwise, it could lead to misunderstandings or disputes later. Consider the following:

• Review all high-level terms including facility type, loan amounts, term of the loan, interest rate, fees (including when they become payable), the commencement date, and other relevant terms.
• Review other provisions such as your ability to redraw or repay the loan facility early without incurring early repayment fees.
• Review what securities you need to provide, and ensure you can provide all securities required (this includes ensuring you’re in a position to grant a 1st registered mortgage or 1st ranking GSA as is required by almost all lenders).
• Know your CPs inside and out and liaise with consultants and other professionals to ensure you can deliver on all the CPs prior to the settlement date. While ASAP Finance offers flexibility around certain CPs, most other lenders strictly enforce these requirements

Lastly, lenders’ application fees are commonly linked to the signing of the letter of offer – irrespective of whether you fulfill the pre-settlement conditions and settle on the settlement date. This means that if you fail to satisfy the pre-settlement CPs and cannot settle, the application fees will still be payable – even if the loan does not proceed.

This re-emphasizes the importance of carefully reviewing the pre-settlement CPs and ensuring these can be satisfied prior to the settlement date.

2. Term Loan Agreement (or Facility Agreement)

A Term Loan Agreement (TLA) is a comprehensive document that outlines the terms and conditions under which the loan is provided. It will include all the details included in the letter of offer as well as additional items such as warranties, covenants, events of default, and other conditions that the borrower must adhere to during the loan term.

Lenders use term loan agreements to establish clear expectations and obligations for both parties. It serves as a legal contract that ensures the borrower understands the terms of the loan and agrees to comply with them.

Think of it as a structured framework for the loan, detailing the financial obligations of the borrower and the legal rights of each party. It also includes provisions for what happens in the event of a default, ensuring the lender has recourse if the borrower fails to meet their obligations.

Things to consider:

• Ensure the terms and conditions within the Term Loan Agreement reflect those agreed in the Letter of Offer.
• Review your covenants and undertakings in detail. Remember, your lender will have provided you the loan based on the information and representations made to them. Any inaccuracies or misrepresentations (whether intentional or otherwise) will likely be an event of default.
• Your obligations will likely extend beyond those that are purely financial. For example, most loan documents for development loans have provisions that consider scenarios where the project falls behind schedule. It is your job as a developer to ensure that the integrity of the project remains intact.
• The loan document will almost certainly have cross-default provisions, meaning that if you default on another loan, you will also be in default on this loan. Run a steady operation and don’t take your eye off the ball if you are running multiple projects.
• On that note, you should understand all events of default in detail.

3. Deed of Guarantee

A Deed of Guarantee (sometimes called a Personal Guarantee or PG) is a legal document in which a third party (the guarantor) agrees to take responsibility for the borrower’s debt if the borrower defaults on the loan.

Lenders use deeds of guarantee to mitigate the risk of borrower default. By having a guarantor, lenders have an additional layer of security, knowing that someone else will cover the debt if the borrower fails to do so.

This document ensures that the lender can recover the loan amount even if the borrower is unable to repay it. It legally binds the guarantor to fulfill the debt obligations, providing financial security to the lender.

All development facilities will typically require the main sponsors of the project to personally guarantee the loan provided to the development entity (being a company or trust).

Things to consider:

• Be prepared to personally guarantee your project. The main sponsors will almost always be asked for PGs and will need to have skin in the game – lenders don’t look favorably towards developers who do not wish to grant PGs or who are solely reliant on investor funds.
• If the borrower defaults, the guarantor must repay the loan – in this sense, you should only guarantee a loan for a project that you have direct control over and that you can control the performance of.

That wraps up Part 1 of our two-part series. In our next blog, we will explore the General Security Agreement, Specific Security Agreement, and the solicitor Pre-sales Undertaking. Stay tuned for more!