A construction finance squeeze as banks and non-bank lenders lower their tolerance for risk in residential development could sink many new apartment projects, reduce supply and worsen the housing affordability crisis, a new real estate debt market report has found.
An expected slowdown in off the plan sales – as buyers find it harder to secure mortgage lending to make purchases given reduced borrowing capacities – could make it even harder for developers to meet the presales thresholds to secure construction funding, and in turn “It’s more of an issue for new projects trying to get out of the ground. There’s been a material shift in [building] contractor pricing which is going to stymie a lot of projects,” Mr Hynes said.“In smaller markets like the Gold Coast you don’t have the depth of contractors available or the [local] workforce, so they are more acutely affected,” he said.
In addition, only 15 per cent of lenders said they had no ICR requirements, down from 26 per cent a year ago.
developers are land banking on unsold units They should give 20-30% discount to make them value for money The building styles are shocking We have Broadbeach as good design but in Syd n Melb they r shocking drab design
Better sink more money into the mainland china marketing efforts
The best way to scale the market and hoarding fund, offsets defaults