A fix in 2026? Four decades of market insight

IN Partnership with

Over 40 years, Fico Finance has seen many property cycles, enabling deep insights into market challenges and opportunities. Fico understands the risk-reward scenarios borrowers face to achieve profitable project outcomes

TODAY’S CONSTRUCTION and development landscape presents a tale of two realities. On the cost side, conditions are becoming increasingly favourable. With interest rates declining – Fico/Select rates now start at 8.45% p.a. – and improvements in both building-material costs and tradesperson availability, flippers, builders and developers can complete projects within budget and on schedule with significantly reduced delivery risk. The revenue and sell side tell a different story. Without a strong exit strategy and clear path to market upon completion, developers risk being caught with excess inventory and may find themselves forced to discount stock or extend higher-cost development facilities. While the residential market remains subdued, there are encouraging indicators suggesting an unevenly distributed recovery is taking shape. Price volatility appears to have

Fico Finance offers first mortgage secured funding to businesses, investors, builders and developers throughout New Zealand. With a wide range of loan products available to support capitalisation, cash flow, bridging, equity release, construction and project finance needs, Fico provides flexible, made-to-measure funding options for advisers and their clients.

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“We’re seeing a market where fundamentals in most places remain sound, but timing and agility are key. Investors and developers need patient capital, expertise and strategic positioning to navigate current conditions”

Finn Brooke, Chief executive officer, Fico Finance

stabilised, demand shows cautious signs of strengthening and market conditions could see meaningful improvement in late 2025 and 2026. This dynamic creates both opportunity and risk for developers. Those who can plan and deliver efficiently with an eye to future demand are best positioned for success as the cycle turns.

A man and a woman checking their finances

What’s being funded?

Published 04 Aug 2025

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Investment purchases Equity release for business purposes Commercial owner-occupied Property development Rescues Bridging finance (open or closed) Equity release for tax arrears Greenfield subdivisions Renovations Residual stock finance

Examples of loan types financed by Fico

“Despite a jagged run of central bank stimulus and tightening, good opportunities exist for borrowers to take advantage of current conditions. Finding the right funding partner to help unlock those opportunities is critical”

Bruce Yelverton, SENIOR BUSINESS MANAger, Fico Finance

With the help of a growing adviser network, Fico has been expanding its support to investors, builders and developers as they navigate today’s complex market. Strategic settlements: Fico provides flexible land settlement and development facilities on interest-only, capitalised or part-capitalised bases to help borrowers move forward with acquisitions or kick off project works without pre-sales. Bridging and residual stock finance: Development-to-hold facilities support borrowers with completed projects who need breathing room and orderly sell-down assistance to maximise sales outcomes.

Forward positioning: Astute developers are capitalising on market conditions by acquiring well-positioned sites on favourable terms, using a 12–18 month pre-development window to secure consents and position for construction when conditions improve. Project restarts: Quality projects strategically paused 12–18 months ago are restarting. By making moves now, these borrowers are betting that saleability challenges will have substantially resolved by completion time – a calculated risk with merit for well-conceived developments. Quality matters: Intelligently designed developments with adequate parking, two- to four-bedroom configurations and strong amenities continue to experience strong inquiry and sale conversion within reasonable time frames. Market fundamentals remain sound for quality product.

Where are the pinch points?

What can Fico offer?

Fico Finance is celebrating 40 years in business this year. The company attributes its continued growth and success through multiple cycles to strong adviser relationships, flexibility to meet clients’ needs, deep market experience, as well as seasoned staff and board expertise. This combination of market knowledge, relationship focus and adaptive capability positions Fico as the ideal partner for advisers seeking creative financing solutions in today’s challenging environment. Streamlined funding with flexible terms: Fico’s flexible financing approach extends to its terms and conditions. For straightforward transactions, the company typically accepts real estate agents’ appraisals rather than requiring registered valuations, delivering clear cost and time savings to borrowers.

While other lenders often condition for quantity surveyor involvement to validate costings and approve progress payments, Fico frequently waives this requirement for experienced development clients. Instead, the company approves staged drawdowns against valuers’ certificates, approved invoices or other agreed milestones. Similarly, while project presales can assist risk management, Fico doesn’t always require them to proceed with funding. Borrowers can fully or partially repay loans at any time during the term without penalty interest, exit fees or early repayment costs. Transparent pricing structure: Fico operates with a straightforward pricing policy featuring no hidden entry or exit fees. Development loans and progressive facilities attract interest on drawn funds only, with no line fees or non-utilisation charges against undrawn loan limits. Private lending through Select Invest: Fico has introduced private funding solutions for non-development transactions through its wholesale investment and lending platform, Select Invest. The platform connects financial advisers and their clients with a network of private investors, each with different risk profiles and lending preferences. Fico participates by co-investing in selected loans or underwriting settlements until subscribed. This approach addresses common concerns in private lending by offering greater certainty around funding availability and settlement time frames, which can be key factors for both advisers and borrowers navigating complex real estate transactions. The partnership itself reflects broader market trends, as private real estate debt continues to gain traction among investors seeking alternative investment opportunities.

Nationwide with a local touch

“We’ve worked hard to build nationwide reach without sacrificing our boutique approach,” says Yelverton. “Whether it’s an infill development in Auckland, an open bridge in Christchurch or a commercial opportunity in a smaller regional centre, we can move quickly through the assessment and approval process with the same hands-on service. That agility is crucial when advisers need solutions for clients in uncertain markets.”

Non-bank property funder lending nationwide since 1985 Providers of short-term, first mortgage secured finance against residential and commercial property, including development & project finance Nelson-based, lending throughout NZ with wide geographic spread – regional centres & provincial deals Practical and flexible credit policy, with a focus on speed and transparency to make deals work Will lend to:

Companies

Trusts

Partnerships

Individuals

(where clear business purpose)

Who we are & what we do

Loan amounts generally ranging from $200,000 to $4,000,000 (with larger case-by-case lending) Short-term lending, generally for 3–18 months Current LVR soft caps of

Can look to supporting second mortgage security to mitigate LVR Will look at non-bank credit profile for any non-CCCFA transaction

Residential

65%

Commercial / lifestyle

50–60%

Bare land

(location dependent)

50–60%

“As would be expected in sustained difficult conditions, we’re seeing some stress indicators. IRD enforcement has intensified, with tax arrears becoming common across sectors,” reports Fico’s senior business manager, Bruce Yelverton. “We’re seeing increased requests for refinancing and top-up facilities to address compliance issues. “Retail and hospitality sectors face particular challenges. While improving from post-COVID lows, these businesses remain cash-constrained, with the availability of working capital injections often determining whether a business survives or fails. Fico has been unlocking property equity to provide cash flow, enabling businesses to trade through and position for future growth.”

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