On-completion value
What is on-completion value in development lending?
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BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED
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On-completion value is a valuer's estimate of what a development will be worth once it is finished — the basis of the loan-to-value ratio on completion, which development lenders test beside loan to cost. Loan to cost asks how much of the project the bank is funding; loan to value on completion asks whether the finished asset would cover the debt if the sales did not. It is an estimate of a future market, so a lender reads it against what buyers are actually paying under the presales, not against the prices the feasibility hopes for.
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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