How smart property developers are locking in their profits, reducing risk and thriving during lockdown!

How smart property developers are locking in their profits, reducing risk and thriving during lockdown!

The property market is on fire, and it’s time to monetise your stock. But with much of Australia’s population slowly emerging from deep lockdown for at least another month and restrictions likely to come and go for who knows how long, developers need to adjust their strategy.

It’s never been more critical to get projects started, finished and sold ASAP!

Lockdown has presented a significant sales obstacle between developers and their most active buyers – downsizers and first home buyers. The appetite is there, but these buyers are missing the opportunity to inspect in-person on-site. As a result, many developers are forced into expensive delays and the extra costs of using channel sales agents to achieve the bank’s presales hurdles.

Meanwhile, stock values and construction costs are going up, threatening to eat into profit margins. But, of course, chaos always brings opportunity, and savvy developers learn to pivot and gain ground in strange times.

The market has flipped how you should consider presales. 

The costs and delays associated with obtaining a high percentage of presales are proving too high. Unfortunately, this means locking in presales is often increasing risk rather than reducing it.

As a result, intelligent investors are avoiding lower profit margins and negotiating construction loans that do not require any presales. Meaning construction starts faster, leaving sales until the lockdown is over, and sales teams can close in person.

Does this sound impossible? It’s not. 

A surge of non-bank capital partners with a strong appetite for zero presales construction loans are meeting the growing demand.

Our most successful clients are asking for more zero presales construction loans. These progressive  developers are the ones to watch; here are the six ways they are locking in their profits:

  1.   Obtaining finance approval ASAP. Don’t waste time in limbo, compromising your profits while you work tirelessly to achieve subpar presales during a lockdown. It’s challenging for those down-sizers and first home buyers to picture their future in your property when they can’t physically get into it.
  2.   Locking in construction costs ASAP. The market is hot, with fewer properties for sale than there are buyers. And you’re not the only one who knows that. So it’s time to lock in construction costs before they skyrocket.
  3.   Commencing construction ASAP. Obviously, but it’s also never been more critical. Getting your project underway will give you the best opportunity to fast track your profits, and who doesn’t want that?
  4.   Achieving price growth during construction. The lack of supply has created an environment that supports further price gains. By getting construction underway, you can sit back and ride the market on an upward trend while your property is under construction.
  5.   Providing owner-occupiers with certainty that the property will be completed. Off-the-plan sales can be nerve-wracking for buyers who want nothing more than to move in and start making their new property a home. Reassuring them by proving the property will be completed and in good time will make your property more attractive. In addition, maximising marketability allows you to optimise sale prices.
  6.   Selling completed stock. It’s so much easier to fall in love with a property when finished and you’re standing inside it. By selling completed stock, you can promote that passion among your buyers, helping to maximise the sale price and minimise selling costs.

Lockdown may be killing your off-the-plan sales, but don’t let it sink its teeth into your profits. 

We’ve brought a ground-breaking Construction Loan product to market with the lowest presales, the highest LVR’s, and the lowest interest rates.

Does your best finance offer give your development project the best chance of success, or is it draining the profit out of it?

Construction loans have the lowest LTV to development costs for finance from $5M to $40M with all locations considered. In addition, finance is delivered by a leading publicly listed non-Bank lender with highly competitive interest rates and fast approvals & settlements.

We’re also developing a ground-breaking Early Equity-Release Construction Loan product. Imagine funding your next development midway through your existing project – with no money down on the subsequent development! 

Anything IS possible…

Find out what’s possible with your current or next project – book a Discovery Call and find out.

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