It is only a matter of time when the property cycle peaks, plateaus and then falls and development site values start to crack.
Larry Schlesinger, Australian Financial Review writes:
“Metropolitan development sites values, which have surged in recent years on a wave of Chinese money, are showing the first signs of correcting after developer Nicholas Smedley secured two sites at discounts of 30 per cent or more after vendors rejected his original off-market offers, thinking they would get more through a public campaign.
Chinese buyers have quit the market in droves, and off-the-plan sales rates have slowed drastically in Sydney and Melbourne meaning the building boom is starting to wane.”
Prudential Finance is Sydney based and services all areas of Australia. Prudential Finance has been procuring development finance for property developer clients for 15 years here in Australia.
Call 1300 550 669 now to discuss your development finance needs.
Development finance from Banks is keenly priced at sub 6% for property developers with experience and good equity in projects. Loan to cost ratios are around 70%. Banks have significantly pulled back lending due to heavier regulation and capital adequacy requirements, although we are finding Bank development finance approvals are still occurring for high quality projects matched with experienced developers.
Mortgage Fund and Private Funds start at 9% p.a. and loan to value ratios are up to 70%.
Developers forced out of the Banking system due to harsher loan criteria are still getting their projects funded by mortgage funds and private lenders.
No Presales Construction Finance is available from 9.5% p.a.
We are experiencing a stable real estate market in Australia which is an ideal time for property developers to capitalise on the very low interest rates. Finance commentators expect interest rates to remain stable for the foreseeable future.
Mezzanine finance is readily available for financially viable real estate projects. Interest rates start from 15% p.a. to 20% p.a.
Joint Ventures are available for projects located in capital cities or fringe areas (not regional). Terms are by negotiation.
Prudential Finance is always happy to discuss upcoming projects with investors who would like to achieve a higher interest rate than currently available from Banks or other institutions. Invest directly into property development projects for returns of 7% p.a. to 20% p.a.
Prudential Finance approved a private property loan for $5.6M for the purchase of a home in the exclusive Eastern Suburbs, Darling Point, with no valuation, at 70% of purchase price and was ready to settle within 3 days!
Prudential Finance is a private lender for non-coded business related loans secured by real estate.
For your next private loan call 1300 550 669 Prudential Finance
Australia’s central bank said the nation’s economic outlook remains uncertain because of the conflicting forces at play and reiterated that interest rates are set to remain on hold.
Members “noted the significant uncertainties around the growth forecast and the importance of considering the risks to the forecast as well as the central projection,” the Reserve Bank of Australia said in minutes released today of its August 5 meeting, where it kept the cash rate unchanged at a record-low 2.5 per cent. “GDP growth was likely to have slowed to a more moderate pace in the June quarter.”
Prudential Finance says; “Prevailing development finance interest rates are providing property developers with an economical and stable finance environment to forge ahead in a solid real estate market.”
Development Finance is easily obtainable for quality projects and qualified developers. Go to Development Finance
Prudential Finance is actively looking to participate in property development joint ventures in Sydney, Melbourne Brisbane and Perth. Minimum project size $10M total development costs. Go to Property Joint Ventures
Partner with Prudential Finance.
Call Prudential Finance 1300 550 669 to discuss your development finance requirements.