Construction Finance
Construction Property Valuation Explained
5 min read- Finance Guide
- Updated 2026
Quick answer
As if complete value
80% to 90%
As if complete valuation is often the primary approval basis
- As if complete basis Finished market value
- Progress checks Stage based
- Reassessment trigger Material change
1300 421 044
1300 421 044
Detailed explanation
Construction property valuation usually involves more than one reference point. The lender may consider the current value of the land and any completed improvements, but the key assessment for approval is often the as if complete value. This is the valuer’s opinion of the likely market value of the finished property once the approved works, plans and specifications have been completed.
Core valuation methods during construction
Lenders and valuers usually apply valuation in stages from approval through to completion
- 01Current land and site value
- 02As if complete valuation
- 03Progress inspection or stage review
- 04Drawdown confirmation
- 05Reassessment if plans or costs change
- 06Final completion confirmation
During construction, lenders and valuers commonly check:
Valuer or inspector reviews completed works against the contract- Lender checks stage against contract and plans
- Next draw is assessed against remaining value and budget
- Material changes can trigger a revised valuation or extra equity need
How construction valuations work
Common valuation points:
-
The valuer often considers the property on an as if complete basis using the approved plans, specifications and fixed price contract
-
The current site value still matters because it forms part of the lender’s security before the build is finished
-
Progress inspections help confirm that each stage claimed by the builder has actually been completed
-
LVR is often measured against the projected completed value rather than only the current unfinished state
-
If costs blow out or the market softens, the lender may reduce the available funds or ask for extra borrower contribution
Valuation checkpoints
-
Current land and works value
Starting point
-
As if complete value
Primary approval basis
-
Final security confirmation
End of build
How lenders review construction value
Lenders review
Comparable sales evidence for the finished product type- Fixed price building contract and detailed specifications
- Approved plans, permits and site details
- Current land value and works completed to date
- Project budget, variations and contingency allowance
- Market conditions and saleability of the finished property
- Any material variations, delays or cost overruns
When the valuation position may change
-
At initial approval
Full valuation report
-
During progress draws
Inspection or desktop review
-
If the project changes
Possible reassessment
-
At completion
Final confirmation of security
Need Help with your Project?
Common problems
Valuation issues during a build can affect approval, drawdowns and the final loan amount. Problems often arise when the finished value does not support the budget, when progress is behind schedule, or when the completed product differs from the original plan.
As if complete value is lower than expected
The projected end value may come in below the total land and build cost, which can reduce the maximum loan and increase the required borrower contribution.
Possible solutions include:
increase equity contribution- review build scope and inclusions
- renegotiate land or build costs where possible
- choose a lender that better understands the product type
Progress does not match claimed stage
If an inspection shows works are incomplete, defective or different from the approved plans, the lender may delay the next draw until the stage is properly completed.
Possible solutions include:
- complete outstanding works before requesting the next draw
- provide updated evidence from builder or certifier
- correct variations so they align with approved documents
- allow extra time for reassessment if needed
Market or project changes affect value
A slower market, major variations or extended build timeframe can affect the lender’s view of value and saleability before completion.
Possible solutions include:
- maintain a contingency reserve
- keep the lender updated on variations
- be ready to inject additional funds if required
- order a refreshed valuation if the situation materially changes
Steps to get Finance
Step
01
Obtain plans, specifications and build contract
Step
02
Arrange valuation on an as if complete basis
Step
03
Submit the full construction finance application
Step
04
Complete progress inspections as each stage is reached
Step
05
Address any valuation or budget issues during the build
Step
06
Complete the project and confirm final value at handover
Speak with a Property Finance Specialist
Construction finance can vary significantly depending on the site, contract price, specifications, market evidence, and the projected end value of the completed property.
A specialist can review the valuation assumptions and help determine which lenders may be comfortable with the project.
Speak with a finance specialist about your construction valuation scenario
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