Tim Downes, a partner at accountants Grant Thornton New Zealand, says Auckland's housing shortage will soon spark a new wave of development.
"Because there is a shortage of housing, particularly in Auckland, a well thought-out residential development proposed by an experienced developer who has good funding relationships will be attractive
to banks," he said.
He believes some failed developers could return and told how he was the receiver for three big projects in Auckland and Queenstown. Who got the funds in the future depended on developers' past behaviour, he said.
"It's important that when the pressure comes on, borrowers give reliable information. Funders tend to have long memories, therefore, it is necessary for borrowers to get on the front foot and not leave banks guessing. How a borrower handles the tough times will often determine whether a bank will finance them again," he said.
"Banks will be looking back at circumstances where the bank has had to take a large write off. If they see a failed borrower who is living a pretty 'full' life, complete with luxury cars, boats and houses, a bank may be provoked into forcing the borrower into bankruptcy," he said.
