South Island short-term lending is expanding well beyond development finance into bridging, equity release and higher-leverage structures. Canterbury and Southland are the only two New Zealand regions outside cool or cold economic conditions, according to the Westpac Regional Roundup for April 2026. Natalie East, business development manager at First Mortgage Trust (FMT) in Christchurch, explains what is shaping demand across the South Island and where supply risks are starting to build. She also outlines how FMT, working in partnership with CapitalGroup, helps advisers support a wider range of borrowers when bank timing, structure or appetite becomes the constraint.
South Island short-term lending demand is being shaped by a broader mix of borrower needs than development finance alone. Advisers are fielding requests for bridging between transactions, equity release for business or investment purposes and higher-leverage structures where main bank timing or criteria do not fit. Canterbury and Southland remain the only two New Zealand regions not in cool or cold economic conditions, per the Westpac Regional Roundup for April 2026. Natalie East, business development manager at First Mortgage Trust (FMT) in Christchurch, spoke to MPA about the region's consistency. 'We seem to be quite insulated down here,' East says. 'Even when things slow down or put some people off doing projects, as a whole we just seem to keep ticking away.' That steadiness has kept FMT's South Island pipeline active across borrower types and project sizes.
Canterbury new dwelling consents reached 2,125 in Q1 2026, a 50.5% year-on-year increase, according to interest.co.nz and StatsNZ data. Te Kaha stadium and a hospitality revival in the central city have drawn businesses and residents back to the CBD. East says sustained public investment has had a direct effect on lending activity. 'The city has obviously had a lot of development go into it,' she says. 'The stadium and just the general hospitality upgrades in the city have helped bring businesses and housing back into the city.' The project mix spans townhouses, apartments, standalone dwellings and subdivisions, with adviser deal flow reflecting that breadth. FMT's Christchurch presence means East is in regular contact with developers and advisers tracking these shifts on the ground.
Foreign buyer activity is contributing to demand in Queenstown and Wanaka, with Australians a notable source. New Zealand's property values look affordable relative to conditions at home, and recent changes to the Overseas Investment Act threshold have opened the door for some additional offshore buyer activity. East says this is showing up in lending conversations. 'We see quite a few Australians buying into Queenstown and Wanaka,' she says. 'Their property market is very turbulent, so we've seen some growth there.' East describes the overall response as measured rather than dramatic. The market is drawing steadily from familiar sources rather than experiencing any sharp influx. That gradual pressure is, however, giving Queenstown and Wanaka projects a firmer demand base than many other South Island locations.
A significant pipeline of inner-city apartment builds is a watch point for South Island advisers placing clients into Christchurch projects. East is candid about the concern. 'We do have a lot of apartment builds coming to Christchurch, which is not something we've really seen before, or not for a while,' she says. 'I'm not sure whether there's potentially going to be a bit of an oversupply of the smaller townhouse- or apartment-type living.' The product mix is already shifting in response. 'There's been a shift away from two-bedroom-no-carpark-type developments, we were already slightly oversupplied with those, to maybe higher-end builds in good locations and good school zones where there's still a bit more margin in the project,' East says. Advisers assessing Canterbury projects should factor this into their due diligence on presales and exit assumptions.
Canterbury build costs have stayed relatively contained over the past two years. StatsNZ data shows costs per square metre for dwellings have held in a $2,815–$2,966 range across nine consecutive quarters, with the trend flat to slightly down. For townhouses, the cost per square metre has fallen from a 2023 peak of around $3,290 to $2,845 in Q1 2026, a cumulative drop of roughly 13%. Suppliers separating fuel surcharges as a distinct line item during peak cost pressure meant the underlying price base was not permanently ratcheted up. Labour availability has also improved since the tightest period of recent years. 'Instead of scrambling to try and get enough people on the ground, there have been plenty of options, which has helped,' East says. Stable costs and better trades access have supported project feasibility across Canterbury.
FMT's blended loan product, delivered in partnership with New Zealand private capital provider CapitalGroup, allows property-backed borrowers to access higher leverage than FMT would typically provide independently. Depending on the project, the structure can achieve up to a 100% loan-to-cost ratio. The benefit for advisers is a single, coordinated lending conversation rather than separate bank and mezzanine arrangements, often involving offshore providers. 'We fund up to where we would normally, depending on the project, and CapitalGroup can provide funding above that,' East says. 'For advisers, it means they can offer clients a more complete funding solution through one coordinated structure, rather than trying to piece together a loan and separate mezzanine funding.' The product is available to advisers who may not have prior experience working with blended capital structures.
FMT takes a deliberately low-pressure approach with advisers who have limited experience in the non-bank lending space. East meets advisers face to face and makes clear that no question is too basic. The first transaction is typically the hardest, and her focus is on guiding advisers through it in a way that builds genuine confidence rather than dependency. The aim is for advisers to be able to articulate the product to their own clients. 'I don't expect them to know everything about the non-bank space,' East says. 'There are so many different providers and so many different options out there that you're not going to be an expert on all of it.' East will also refer advisers to other providers if a deal does not suit FMT, which she sees as part of building long-term trust with the adviser community.
Natalie East: business development manager, First Mortgage Trust (FMT); based in Christchurch; FMT is an investment fund manager specialising in property finance with over $2 billion in funds under management and more than 7,500 investors nationwide; offices in Auckland, Tauranga, Wellington and Christchurch with over 70 staff.