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The serious impact that the current credit squeeze is having on the property development industry has been well reported by both DFP and widely broadcasted by the wider press. Globally we are all bearing witness to the volatility in markets created by sudden regulatory and monetary policy.
By Development Finance Partners / Matthew Royal Construction Finance via non-bank and private underwriters A substantial property developer had become frustrated with the major Banks and their inflexibility around debt coverage & construction loan with pre-sales. In a 400 lot staged residential house and land estate in Sydney’s South West, the Client had previously achieved strong take up rates during the past project Stages. Despite this proven record of accomplishment, the major Banks still insisted on 80% debt coverage for […]
“Debt is the lifeblood of sustainable property development.” Market conditions since 2009 have created a difficult environment for developers (particularly of development projects) as the majority of lenders have tightened pre sale hurdles and loan to value ratio (LVR) covenants. The success of a construction project will depend on a number of key components, including: The lead time to commencement of construction (holding costs) The entry price into the land Total project cost The capability of the developer, the builder […]
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