The Government expects its reform of the building consent system to take effect in 2026. But investors should not assume they have until then to prepare. Lenders and insurers will start changing their requirements long before Parliament passes anything.
Banks price risk in real time. Once the Government signals a shift, lenders act as if the law is already here. Proportionate liability and insurance obligations will quickly become part of loan approval conditions.
“Do not wait for the Bill to pass,” says Sarina Gibbon, APIA GM. “Banks will want to see that your project is protected well before the law changes. They are not in the business of lending into uncertainty.”
Investors should expect banks to ask for:
- Proof of warranty cover or indemnity insurance.
- Evidence of contractor solvency, track record, and insurance.
- Detailed contracts, inspection records, and risk assessments as part of applications.
- Clear risk cover before approving funds, with weak projects facing higher costs or refusal.
This is the same pattern seen in Australia. When liability rules and warranty schemes were introduced there, banks moved first. They demanded cover and documentation years before regulators enforced anything. New Zealand lenders will follow suit.
The practical steps for APIA members are clear. Talk to your lender now and ask what protections they expect to see over the next 12 months. Build warranty and insurance costs into your feasibility models and treat them as non-negotiable. Prepare your contractors to provide the paperwork banks will require. Keep your records sharp and accessible, because strong documentation speeds up approval as much as it protects you in disputes.
Sarina says: “Investors who wait until banks change their credit policy will be on the back foot. The smart move is to prepare now. If you can show your project is covered, financed, and documented, you will be ahead of the market.”
This is about more than compliance. It is about access to finance. Projects that cannot meet new expectations will stall. Those that can will find lenders more willing to engage and buyers more confident to commit.
The transition period will be uneven. Some investors will struggle to meet new demands, while others will move early and secure a competitive advantage. APIA’s view is that lenders shifting ahead of legislation is not a threat but an opportunity for well-prepared members to move to the front of the queue.
This is Part 3 of our three part blog series on building consent reform. “>Part 2 examined insurance and warranties as the new normal. Together, the series gives APIA members a head start in adjusting to reforms that will reshape the market.
This article is general information only and not investment advice. Members should seek personalised advice before making decisions.
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