A quick heads-up: The information in this article is designed as a general educational guide only and does not constitute personalised financial, tax, or legal advice. Because everyone's situation is unique (and bank policies change frequently), we recommend speaking with a licensed Financial Adviser to see how this applies to your specific circumstances. For full transparency on our terms of service, how we are remunerated by lenders, and any specific situations where a fee may apply, please read How We Get Paid.
Buying a brand-new home—whether it is bought off the plans or recently finished—is a great way to secure a warm, dry house and avoid the bidding wars of the existing housing market.
However, getting your mortgage fully approved for a new build introduces a unique hurdle: how does a bank value a house that does not even exist yet?
If you are buying a new build, your mortgage adviser will need to guide you through the valuation process. Here is a plain-English breakdown of what a registered valuation is, why you might need two of them, and how recent banking policy changes could save you money.
Scenario A: The turnkey property
A turnkey property is exactly what it sounds like. You sign a fixed-price contract, pay a deposit upfront (usually 5% to 10%), and you do not make another payment until the house is completely finished and you can unlock the front door.
Do you need a valuation for a turnkey?
In the past, nearly all lenders required a registered valuation for turnkey properties to prove the finished house was actually worth the purchase price.
Scenario B: The construction loan
If you are buying a piece of land and hiring a builder to construct a custom house (or undertaking a major renovation), you will use a construction loan. Instead of paying one lump sum at the end, the bank releases your loan in stages as the builder finishes the foundations, the framing, the roof, and the final fit-out.
Because the bank is releasing money while the house is still an active building site, their lending criteria are much stricter. This traditionally triggers a two-step valuation process.
Step 1: The as-if-complete valuation
Before the bank lends you a single dollar to start construction, a registered valuer must assess the builder's architectural plans, the location, and your fixed-price building contract. Based on this paperwork, they will issue a formal as-if-complete valuation report—which simply means what the house will be worth the day it is finished.
- The Cost: Typically between $1,000 and $1,400 depending on your region and the complexity of the build.
Step 2: The completion certificate
When the house is finally built, the bank needs proof that the builder actually delivered what was promised on the original plans before they release the final payment. The valuer will physically visit the finished property and issue a completion certificate.
- The Cost: Typically around $350 to $500.
- What it does: The valuer is not giving the house a new market valuation. They are merely confirming that the home was built to the original specifications and that the initial as-if-complete valuation still stands.
- The Good News: Some banks are now waiving the need for this final certificate for standard builds (often relying on the standard council sign-off instead), allowing you to bypass this extra cost at the finish line.
What if the valuation comes back lower than the purchase price?
Let's say you agreed to a fixed-price land and build contract totalling $750,000. If the registered valuer looks at the plans and determines the finished product will only be worth $700,000 in the current market, the bank will only lend against that lower $700,000 figure.
This can happen in a slower property market, but you have several options to address the shortfall. If this happens, contact your mortgage adviser and your solicitor immediately to explore these pathways:
- Renegotiate with the developer: We work alongside solicitors who can attempt to negotiate with the developer to lower the final purchase price to match the registered valuation.
- Rework the lending: We can look at restructuring your deposit, changing your loan setup, or moving your application to a lender with a more favourable valuation policy.
- Bridge the gap: If renegotiation fails and you still wish to proceed, you will need to fund the shortfall yourself using additional cash savings or equity from another property.
How to order your valuation
Because the rules vary drastically between lenders, you must always wait for your adviser to confirm exactly which method your bank requires before taking any action.
For major banks: You must never order the valuation yourself.
For smaller lenders: On the flip side, a handful of smaller banks and non-bank lenders actively require the client to arrange their own valuation.
We will handle the logistics and tell you exactly which process applies to your specific loan structure when the time comes.
