Written by David Lovato – CPC Development Lending Solutions

February 2026

For small and mid-sized developers, project feasibility has always been a balancing act between costs, end values and funding. In 2026, that balance is becoming harder to maintain. 

High construction costs and rising inflation are now front and centre in feasibility assessments, and in many cases are the difference between a project proceeding or being shelved.

Construction costs are still rising

Recent data showed construction cost growth is no longer surging at the pace seen during the post-COVID boom, but it is still rising. Cotality’s Cordell Construction Cost Index recorded a 1.0% increase in the December 2025 quarter, the strongest quarterly growth of the year.

The annual growth rate of 2.5% was significantly below the extreme peaks of recent years and the pre-COVID decade average of 4.7%. But for developers working on tight margins, any upward movement matters.

Structural timber and cement products recorded price rises after remaining stable for much of 2025, while wage increases following the Fair Work minimum wage update are adding to labour costs. Skilled trade shortages and supply chain adjustments are expected to remain challenges through 2026.

This uncertainty makes accurate cost forecasting – already tricky – even more difficult.

Inflation and interest rates

Inflation is also proving persistent. The Reserve Bank of Australia’s (RBA’s) preferred trimmed mean measure reached 3.3% year-on-year to December, up from 3.2% the month before, according to the Australian Bureau of Statistics. This was outside the RBA’s 2-3% target band. 

Housing-related costs – including rents and new dwelling construction – remained key contributors.

In response to this inflation news, the RBA lifted the cash rate to 3.85% at its first meeting of 2026. Even if further increases are limited, the move reinforces a “higher for longer” rate environment.

For developers, this creates a double squeeze. Higher rates increase your borrowing costs for land and construction, while also reducing buyer borrowing capacity, which can discourage buyers from entering the market. A slowdown in demand can dampen price growth, meaning end values for completed projects may not rise as robustly as developers had hoped when factoring in rising input costs. 

The feasibility challenge

This dual pressure creates a significant challenge. Without end value increases to offset rising construction costs, many projects won’t stack up anymore. Developers are finding that deals that may have looked viable six months ago no longer meet required return thresholds.

Feasibility buffers can be quickly eroded. A modest build cost variation, slower pre-sales or a few extra months on the schedule can significantly reduce margins. With thinner margins, the tolerance for error is lower than it has been in years.

Opportunities still exist, but discipline is key

None of this means development opportunities have disappeared. Australia continues to face a structural housing shortage, listings remain below trend and supply constraints persist. There is still strong demand for well-located, appropriately priced projects, particularly in affordable segments and growth corridors.

Government initiatives are also helping support feasible projects. Programs such as New South Wales’ Pre-sale Finance Guarantee can reduce risk for lenders and improve funding access for qualifying developments, while federal tax incentives for Build to Rent projects can boost after-tax returns and improve overall project viability for eligible developers.

However, feasibility studies now need to be more conservative and detailed. Lenders are increasingly stress-testing projects against higher rates, and you need to factor in cost escalation and slower price growth. Realistic timelines, detailed cost plans and careful revenue assumptions are becoming essential.

Finance strategy matters more than ever

In this environment, finance structure plays a larger role in the success of your project. Loan terms, lender appetite, pre-sale requirements and flexibility can all influence project outcomes.

Working with a specialist development finance broker can make a real difference. At CPC Lending Solution, we understand how different lenders assess risk, feasibility and locations, and can match projects to lenders with the right appetite.

We can also help package your finance application to clearly present your contingencies, margins and cost controls – all areas lenders are scrutinising more closely in the current climate.

You can read more about how CPC approaches development finance in our CPC Lending Solution’s Development Lending Guide.

CPC Lending Solutions helps developers structure finance that reflects today’s cost pressures and feasibility realities. If you’re planning a residential or mixed-use project, contact CPC at info@crowdpropertycapital.com.au or submit an enquiry to structure your finance with confidence.

 

Written by David Lovato – CPC Development Lending Solutions

December 2025

 

The NSW Government has released the next major stage of its Housing Pattern Book: a collection of nine architect-designed mid-rise apartment patterns aimed at speeding up approvals and lowering upfront costs for developers. The new designs – ranging from three to six storeys – build on the eight low-rise “missing middle” patterns released earlier in 2025.

For developers, builders and mum-and-dad investors, the move to standardised mid-rise designs points to a clearer, more predictable pathway for medium-density projects. By reducing design uncertainty and simplifying early assessment, it has the potential to shorten timelines and lower holding risks, which in turn shapes how development finance is structured and assessed.

A broader range of ready-to-build designs

The mid-rise release includes:

• Four patterns for small lots
• Three patterns for large lots
• Two corner-lot designs

All have been produced by leading architectural practices across Australia and New Zealand. The designs are contemporary, energy-efficient and meet the Australian Building Codes Board’s Liveable Housing Design Standard. With options for solar access, cross-ventilation, adaptable layouts and various material palettes, the patterns maintain architectural quality while being practical to build at scale.

Faster, simpler approvals for mid-rise projects

Unlike the low-rise patterns, which can use a complying development certificate (CDC), the mid-rise designs still require a development application. But the government has implemented important measures to streamline the process.

Because the designs are pre-endorsed by the NSW Government Architect, councils have been instructed to:

• Remove design review panel requirements
• Halve average assessment times
• Assess patterns under officer delegation, avoiding Local Planning Panel delays

In early 2026, new planning laws will introduce an even faster “targeted assessment pathway” specifically prioritising mid-rise pattern book designs.

For developers, this could provide more certainty. The hope is that timeframes become clearer, risk around design modifications is reduced, and feasibility modelling becomes easier to forecast.

Lower upfront design costs – with limits

The pricing for the patterns is heavily subsidised for the first six months:

• Small and corner lot designs: $1,500 per lot (normally $15,000)
• Large lot designs: $2,500 per lot (normally $25,000)

While not as cheap as the introductory $1 pricing for the original low-rise patterns (available until January 2026), these fees are still far below the cost of bespoke architectural design. For developers handling multiple lots, the savings can be meaningful.

However, as with the low-rise patterns, these plans are not turnkey solutions. Developers will still need:

• Site-specific engineering
• Planning documentation
• A registered architect (required for all mid-rise projects)
• Quantity surveying
• Construction certificates
• Adjustments for site slope, bushfire, soil or flood conditions
  

The patterns reduce design complexity and approval risk, but they do not eliminate the need for full due diligence.

What the expanded Pattern Book means for development finance

For lenders, the mid-rise patterns help address one of the biggest barriers to financing small-to-medium residential developments: uncertainty.

Standardised, pre-endorsed designs will make it easier for a lender to assess:

• Buildability and construction risk
• Likely build costs (within a tighter band)
• Approval timelines
• End valuations, thanks to clearer comparables

With less ambiguity, developers – particularly small builders or first-time apartment developers – can present a stronger feasibility and secure funding with fewer unknowns. Faster approvals may also reduce holding costs, improving project viability.

However, lenders will still closely assess contingency allowances, builder experience, equity position, presales (where required) and cost escalation risks.

Why developers still need a specialist broker like CPC

The pattern book removes friction, but it does not guarantee funding. Even with streamlined designs and faster approvals, development finance remains complex. Lenders interpret the pattern book differently, credit appetites shift frequently, and individual project variables still influence borrowing capacity, structure and pricing.

A specialist broker like CPC Lending Solutions understands how lenders are assessing pattern book projects right now, which lenders are backing mid-rise schemes and what parameters developers must meet to secure competitive terms. We can help structure funding that aligns with realistic timelines, cash flow needs and lender expectations – ensuring that the benefits of the pattern book actually translate into a deliverable, financeable project.

Before you begin planning finance for your next mid-rise development, you can also download CPC Lending Solution’s Development Lending Guide for a clear breakdown of lending criteria, funding structures and market insights.

Headline image: Small Lot Apartment 04 by Neeson Murcutt Neille, one of the nine approved designs. Credit: planning.nsw.gov.au

CPC Lending Solutions helps developers secure finance for projects using the NSW Housing Pattern Book. If you’re planning a mid-rise or missing-middle development, contact CPC at info@crowdpropertycapital.com.au or submit an enquiry to structure your funding with confidence.

Written by David Lovato – CPC Lending Solutions

October 2025

Off-the-plan projects can be a smart way for developers to manage cash flow and secure early sales, but getting finance for them isn’t always straightforward. With construction costs, market confidence and lender appetite all shifting over the past few years, developers face a unique set of challenges when trying to get a project off the ground.

Here are three common financing challenges and practical strategies to overcome them.

1. Demonstrating project feasibility and profitability

Lenders have become increasingly cautious following the construction cost surge during COVID-19, when many projects became unviable due to rising expenses and stagnant sale prices. According to the Australian Bureau of Statistics (ABS), the average cost to build a house jumped 6.7% annually from 2019-20 to 2023-24.

This combination of rising costs and unpredictable market conditions led many lenders to tighten their lending criteria, requiring more robust feasibility and pre-sale evidence before approving funding.

The good news is that conditions have improved since then. Lower interest rates are boosting borrowing capacity and apartment prices have outperformed house prices across many capital cities over the past year. Cotality’s home value index for September showed apartment prices increasing more over the last 12 months than houses in Brisbane, Adelaide and Perth. 

For developers, this shift is important: Stronger apartment values improve project feasibility by widening profit margins, supporting higher-end values and helping to offset the impact of higher build costs. It also increases lender confidence, as projects are more likely to achieve sales prices that align with or exceed forecast levels.

Lenders will still want to see a detailed feasibility study demonstrating that a project is viable and profitable. Your feasibility should clearly show how your project capitalises on these improving conditions, with realistic cost estimates and conservative sale price assumptions.

Working with an experienced broker can help ensure your figures are accurate and presented in a way that builds lender confidence.

2. Managing volatile construction costs

While construction costs have stabilised compared to the extreme volatility of the pandemic, they continue to rise modestly. Cotality’s latest Cordell Construction Cost Index recorded a 2.5% increase in residential construction costs over the 12 months to September 2025, down from 3.2% over the same period last year. 

The current rate of growth is under the pre-pandemic decade average of 4.0%, but labour shortages and strong public infrastructure demand are likely to keep upward pressure on prices. This means that although construction cost growth is below long-term averages, margins remain tight. Material and labour costs are still elevated, and competition for skilled trades remains strong amid record infrastructure spending.

You should always enter into fixed-price building contracts where possible, or at a minimum, secure detailed quotes with realistic contingencies of 10-15%. 

Working with established builders who have weathered recent market volatility also demonstrates prudence to lenders. 

3. Meeting pre-sale requirements

Most lenders require a percentage of pre-sales before releasing construction funding. Traditionally, developers have needed to pre-sell between 50% and 80% of dwellings to qualify for loans – a significant hurdle that often delays or stalls projects.

However, many lenders also favour boutique-style apartment developments, typically between four and 20 units.

Developers who “meet the market” – through design, pricing and location – are more likely to secure pre-sales early. This offers an opportunity for smaller projects to secure funding over larger, more risky developments. 

For instance, the luxury apartment market continues to perform well, driven by downsizer demand. According to Longergan Research, 40% of respondents in New South Wales and the ACT aiming to downsize in the next five years say they are looking for an apartment and 23% of respondents say they will switch to a smaller home but at the same price as their current house. 

This demographic shift is underpinning strong demand for premium, low-maintenance apartments in desirable suburbs, helping you achieve faster pre-sales and improve your eligibility for construction funding.

In NSW, you may also benefit from the state government’s new $1 billion Pre-Sale Finance Guarantee scheme, designed to ease funding bottlenecks by helping eligible off-the-plan projects access finance with lower pre-sale thresholds. The scheme, which launched officially in September 2025, could provide additional flexibility for developers meeting at least half of their pre-sales targets.

CPC will take a closer look at how the scheme works – including eligibility criteria, benefits and potential lender impacts – in next month’s detailed analysis.

Seizing the opportunities 

Off-the-plan developments remain an attractive opportunity for experienced developers and small building companies. The key is balancing project feasibility with lender expectations, and that starts with having the right finance partner.

An experienced broker can help you identify lenders that are open to smaller or boutique projects, navigate pre-sale requirements and structure funding to suit project timelines. We can also negotiate flexible terms and ensure you are well-prepared to meet lenders’ criteria from the outset.

CPC Lending Solutions is a property development and residential finance specialist. Whether you’re a developer needing funding for land, construction, or residual stock, or a buyer looking for the right mortgage, we’re here to help. Contact us at info@crowdpropertycapital.com.au or fill in this form.

Written by David Lovato – CPC Lending Solutions

August 2025

In an effort to fast-track new housing and tackle New South Wales’ affordability crisis, the state government has launched the NSW Housing Pattern Book – a collection of architect-designed plans available for as little as $1 per design, complete with a streamlined approval pathway. 

What is the Housing Pattern Book?

The Pattern Book features eight architect-designed templates for terraces, townhouses, semis and manor homes. These are the “missing middle” housing types that bridge the gap between detached houses and high-rise apartments. 

The designs were created by respected architects and are standardised for efficiency, yet adaptable to different site conditions and client preferences, including varying room formations and layouts.

These designs are backed by the NSW Low and Mid-Rise Housing Policy which encourages development particularly near town centres and transport hubs.

The state government says these designs can be approved via a Complying Development Certificate (CDC) in as little as 10 days, cutting months off the traditional development application process.

What does the Housing Pattern Book include?

The Pattern Book offers ready-made designs and quick approval times, but it is not a full-service solution. You’ll still need:

• Site-specific engineering
• Energy assessments
• Bushfire, soil or flood adaptations
• Compliance sign-off and construction documentation

And while it reduces red tape, it also does not address high land costs, labour shortages or rising prices of building materials – all factors impacting housing delivery in the state.

What does a home from the Housing Pattern Book cost?

The plans are currently available for $1 until January 2026, after which they’ll be priced at $1,000. The state government said this is considerably lower than the upwards of $20,000 developers and investors typically spend on custom architecturally designed homes. 

But the bigger question is how much will they cost to build?

According to Rider Levett Bucknall, residential construction costs in Sydney in 2025 range from $2,500 to $7,600 per square metre. With Pattern Book home sizes ranging from 90 to 140 sqm, that puts base build costs somewhere between:

• $225,000 to $350,000 (lower range)
• $684,000 to $1.06 million (upper range)

These ranges exclude the cost of land. The Urban Development Institute of Australia found the average cost of a vacant lot in Greater Sydney was $666,670 in 2025.

The above costs also exclude site-specific modifications, compliance documents and construction certificates. But it provides a baseline. The standardised design and construction methodology could help keep costs down, especially if developers can build at scale.

While the government hasn’t put a specific price on the build cost of these homes, a government official told The Guardian that using the pattern book could result in construction cost savings of 5% to 17% compared to other non-pattern book designs.

What does the Housing Pattern Book mean for securing finance?

From a financing perspective, the most powerful benefit of the Pattern Book is the reduction in time and uncertainty. By offering pre-approved designs and a fast-tracked approval pathway, the Pattern Book brings a level of predictability that has direct financial benefits, including:

• Potentially lower holding costs from faster approvals
• More accurate feasibility assessments due to predictable input costs
• Improved cash flow from lower upfront design costs
• Easier comparisons of builders’ quotes thanks to the standardised designs

For lenders, this increased certainty is a big plus. When the design, planning pathway and cost inputs are largely known upfront, it can be easier to assess project risk and funding requirements. That can improve confidence in the numbers, reduce the back-and-forth during loan assessment and, ultimately, make it faster and simpler to secure finance.

Headline image: Terraces 01 by Carter Williamson, one of the eight approved designs. Credit: planning.nsw.gov.au 

CPC Lending Solutions is a property development and residential finance specialist. Whether you’re a developer needing funding for land, construction, or residual stock, or a buyer looking for the right mortgage, we’re here to help. Contact us at info@crowdpropertycapital.com.au or fill in this form.

 

Written by David Lovato – CPC Lending Solutions

July 2025

When applying for development finance, understanding how lenders assess risk can significantly improve your chances of approval. Beyond the numbers, they evaluate the project’s viability, your experience and the safeguards in place if things don’t go as planned. 

Here are five core considerations:

1. What level of security can the borrower offer?

Security gives lenders protection if the loan isn’t repaid. In development finance, this usually includes:

• First mortgage over the site – This is the main form of security, giving the lender the right to sell the land if the loan defaults.
• General Security Agreement (GSA) – Covers broader business assets like equipment, IP, and income rights.
• Directors’ personal guarantees – Adds extra assurance by making you personally liable if the company defaults.

The stronger the security, the more favourable your funding terms are likely to be.

2. What experience does the borrower and project team have?

Lenders prefer borrowers with a proven track record. They’ll assess your past projects and your team’s experience, including the builder, project manager, and consultants. A capable, experienced team gives lenders confidence that the project will be delivered on time and within budget.

3. What level of funding is required?

Be clear about how much funding you need and how it compares to the project’s value and cost. Lenders look at:

• Loan-to-Value Ratio (LVR)
• Loan-to-Cost Ratio (LCR)

Lower ratios mean lower risk, which can lead to better terms. Having your own equity invested is also viewed favourably.

4. Is the project profitable?

Lenders want to see that the project has a healthy profit margin. A well-prepared feasibility, supported by budgets, timelines and market data, helps build confidence. Pre-sales can further strengthen your case by showing demand and providing a clearer loan repayment pathway.

5. Are there contingencies and an exit strategy in place?

Lenders want to know you’ve accounted for risks like delays, cost overruns, and planning issues. A clear exit strategy – whether through pre-sales, asset sales, or refinancing – is essential. Strong risk management and a defined loan repayment plan go a long way in securing approval.

Need expert guidance? CPC Lending Solutions specialises in development finance for land, construction, and residual stock. We help structure your application and connect you with the right lender. Email us at info@crowdpropertycapital.com.au or contact us here.