For Immediate Release:
26th October, 16: Property investment in Australia is in the midst of major changes, as witnessed at the recent Aus-China Non-Bank Lending Conference. This inaugural event was prompted by the major banks’ tightening of funding to property developers.
With non-bank financing becoming a major alternative for developers, the conference was organised by business intelligence and networking organisation, Basis Point.
The decision by most traditional financial institutions to clamp down on loans has created a $68 billion private lending market, with seasoned financiers such as Credit Connect Capital Ltd stepping in to fill the void.
The conference attracted hundreds of developers, buyers and agents seeking funding, highlighting the fact that the situation is becoming dire.
The major banks’ decision to reduce funding was born out of concern over the number of new apartment towers, and increasing restrictions on off-shore buyers. But leading economists see this as a backward move, which could have devastating effects on Australia’s economy.
The Urban Development Institute of Australia reported that, after surveying developers, 78% expected at least one of their current projects to be delayed due to funding restrictions. And 60% said they were struggling to obtain finance through traditional financial institutions.
The situation is not limited to Australia, either. Over the past 12 months, 35 apartment projects in Auckland have been axed, prompting fears about the lack of affordable housing in New Zealand.
Becoming known as Australia’s fifth bank, or ‘shadow bank’, it is private loan lenders such as Credit Connect Capital who are stepping up to help developers complete their projects here. This, in turn, is creating mortgage investment opportunities, at a time when traditional term deposits and savings plans are just not delivering.
As far back as 2013 many developers were expressing fears about the future of funding in Australia and it seems their concerns were justified. However, the banks’ concerns may not be as accurate, with major residential developers, such as Stockland and Lendlease, delivering record profits this year.
Phone Credit Connect Capital on 1300 795 507.
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*The information contained in this document has been prepared by Credit Connect Capital (CCC) for general purposes only, while every care has been taken in regards to its accuracy no warranty is given or implied. The information contained herein does not constitute financial product advice and or an offer to invest. We recommend that any person obtain financial, legal and taxation advice prior to making any investment with CCC.