Development feasibility
What is a development feasibility, and how does a lender read it?
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BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED
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A development feasibility is the developer's projection of a project's economics: land, construction, fees, interest and contingency on one side, the expected sales on the other, and the margin between them. A lender reads it as the developer's argument rather than as a fact — testing the sale prices against presales and comparable sales, the build cost against its quantity surveyor's estimate, the programme against the interest it will consume — because every overrun and every price cut comes out of that margin before it reaches the bank.
BASIS Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.
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