Beat the budget squeeze with Development Finance Partners

Beat the budget squeeze with Development Finance Partners


Baxter Gamble

By Development Finance Partners / Baxter Gamble

Households across the country will soon feel the effects of the federal government’s recent budget. Cuts to family allowances and other rebates, and higher costs for health, education and fuel, will inevitably have an effect on household spending and consumer confidence in general.

But what does the budget squeeze mean for residential property demand and what impact will it have on the property development sector?
The news isn’t great if your company is looking to secure its position in the property industry, but with only the banks to rely on. The banks already provide high levels of debt, but there is nothing to suggest that they will continue to do so in future.
Development Finance Partners, on the other hand, offers a helping hand to developers wishing to secure funding. DFP can provide developers the financial backing they need, even in uncertain economic times, and can help them bring their development profits forward.
With households across the country bracing for budget distress, property investors need to know that their existing property assets are secure, and they need to have faith that any new venture of theirs will be successful. Middle-class Australians are already struggling under the burden of rising costs, and the added imposition of the government’s budget measures won’t help matters. They certainly won’t help if you’re a property investor, with reduced consumer spending bound to have an impact across all sectors of the economy. None will be hit harder than the housing and construction sector.
The Reserve Bank of Australia (RBA) has kept interest rates low in an effort to stimulate non-mining sectors of the economy. However, interest rates in Australia are still significantly higher than in most developed economies. In Japan, for example, the official interest rate is 0.10 per cent, in the US it is 0.25 per cent and in Britain it is 0.50 per cent. This means that Australians face rates that are approximately 25 times more expensive than the Japanese and five times more expensive than the British.
Still, the housing and construction sectors have benefited from the RBA keeping interest rates as low as it has. But for how much longer when the RBA finally decides to raise interest rates, and if families are already struggling to pay their mortgage? And what of the generation of first-home buyers whose ability to afford a deposit has been hit hard by rising living costs and who face the prospect of interest rates on the rise?
With belts being tightened at home, now is the time for investors to consider getting the advice and backing they need to negotiate an ever-changing economic environment. It’s advice and backing that Development Finance Partners can provide any property investor, thus helping them meet any future challenge head on.
To discuss how we can help you fonance your commercial property development give us a call today or contact us here!

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