Last challenging years show signs of turnaround as developers & lenders plan for growth in NZ property market
The past two years has been a rollercoaster for New Zealand’s property market. Developers have faced high interest rates, slowing residential sales, and economic uncertainty. Yet, signs of optimism are starting to emerge. Interest rates are beginning to ease, and developers are gearing up for new projects, with many already planning for 2025.
According to Vincent Capital, a leading Auckland-based property financier, this shift reflects a market starting to regain its footing. “Recently there has been a subtle uptick of confidence in the development space,” says Henry Chen, Head of Lending at Vincent Capital. “Developers are starting to plan their new projects for 2025, and the residential market looks to be awakening as home loan interest rates begin to drop.”
Facing challenges with creativity
Despite some positive signals, the past year hasn’t been without its challenges. Slower sales in the residential market have left developers grappling with unsold stock, creating hurdles for those needing to refinance or exit projects. It’s a tough spot for many, but Vincent Capital has made it a priority to help their clients through this period.
Vincent Capital has worked with brokers and developers to ensure that their loans have some headway to provide alternative refinancing options when the developments are completed, ensuring projects stay viable even when the market doesn’t play along. These kinds of solutions reflect a broader trend in the industry: a push for flexibility and collaboration to navigate a changing landscape.
“The key is understanding each project’s unique needs,” Chen says. “We continue to work with brokers and their clients to find ways to get their development construction underway as quickly as possible. This could include looking at how the funding is structured, whether pre-sales are required, and if so, when they are needed.”
Despite these challenges, this year has been significant for the lender, and it celebrated a series of major milestones. It surpassed $3.2 billion in total lending, which has contributed to the construction of over 5,500 new homes across New Zealand—a tangible sign of its role in supporting housing development.
Another standout achievement was securing a $300 million funding facility with global financial heavyweight Goldman Sachs, strengthening its capacity to back residential construction throughout New Zealand.
A sense of optimism
As the market looks towards 2025, the mood is cautiously optimistic. Developers are showing renewed interest in breaking ground on new projects, encouraged by rate adjustments and a sense that the residential market may finally be turning a corner. Vincent Capital are also preparing for what will be a busy year, with new products and strategies to support brokers and their clients coming soon.
In the South Island, for instance, having a dedicated local presence is becoming increasingly important. Vincent Capital is currently in the process of expanding its operations, with a new team in Christchurch to provide on-the-ground support for regional projects. It’s a strong sign of how lenders are evolving to meet the needs of a dynamic market.
With interest rates dropping at Vincent Capital— some by as much as 1.7% on specialized products—developers and brokers alike are finding room to breathe. For instance, they have recently dropped the interest rate of their specialised Builder Loan product to 8.25% p.a. (fees payable, t&cs apply) which is great news to those experienced developers who are starting new projects now to bring new houses into the market in late 2025, in anticipation of increased demand then as home loan rates continue to fall and lack of supply due to fewer projects being started in the past year.
This year has shown that even in a volatile market, there’s room for opportunity. The collaboration between developers, brokers, and lenders continues to be a cornerstone of progress, ensuring that when the market moves, they’re ready to move with it. For now, all eyes are on 2025 as New Zealand’s property sector gears up for the next chapter.
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