As we move through spring, we’re seeing a noticeable uptick in New Zealand's property development activity.
This resurgence aligns with recent improvements in the economic climate, especially given the Reserve Bank of New Zealand (RBNZ) recently lowered the Official Cash Rate (OCR) by 50 basis points to 4.75%, the development finance market is seeing a notable impact. The October rate cut aims to support the struggling New Zealand economy, which has faced challenges such as a potential recession, rising unemployment, and pressure on sectors like construction, retail, and exports. By reducing the OCR, the RBNZ hopes to provide relief for borrowers, including those in property development, as it seeks to boost activity amid declining business confidence.
Historically, we see builders and developers gain confidence around this time of year, often spurred on by falling rates. This OCR decrease has contributed to competitive rates across various lenders, making development finance more accessible and potentially more lucrative for both large and small-scale projects. This shift is evident in regions like Auckland, Wellington, and Queenstown, where demand for projects continues to grow. From single-spec builds to larger subdivisions and multi-townhouse developments, we’re working across a range of projects and seeing robust activity in each of these areas.
Here at NZ Mortgages, we work with over 15 construction development lenders nationwide. With diverse options, we support projects from modest family homes to high-end, custom builds on challenging terrains. While funding availability is broad, strategic planning remains essential. We often find it beneficial to utilize different lenders at various project stages—for instance, opting for a low-rate lender to acquire land and then switching to another lender for development financing. This flexibility maximises cost efficiency while accommodating the varying interest rates typical of development loans
Whether you’re an investor, a developer, or considering a project in the future, now’s an excellent time to explore the possibilities in development finance. With tailored guidance, you can navigate this dynamic market with confidence. To learn more about financing options or to start your next project, contact our team at NZ Mortgages or give us a call at 0800 100 300.
