NON-bank lender Chifley Securities has loaned a record $600 million plus in FY16 to investors, builders and property developers, as a result of the major banks tightening their lending criteria.
The 20 month old group currently has $230 million in loans to projects currently in progress, with loans ranging in size from $1 million to $50 million in first mortgages, mezzanine, bridging and construction finance.
Chifley Securities’ director Joe Morello said with $1.1 billion worth of loan funding available, Chifley Securities is finding strong demand from commercial and residential property developers who do not fulfil the major banks’ new, tighter requirements of pre-sales and added security.
“We are fulfilling a demand from developers who are not meeting the banks’ latest demands for higher pre-sales, especially where the majority of buyers have been foreign.
“We are providing finance for pre-sales guarantees of 65% of total sales, bridging the gap that has opened up as the major banks have squeezed projects with a strong component of foreign sales,” he added.
During the year Chifley Securities launched a property development division, which has financed 15 projects worth $208 million in loans, mostly covering medium density residential developments in Sydney’s western region, as well as Melbourne and other major cities.
Morello said despite the historic low interest rates and demand from buyers, the banks are becoming much more difficult to deal with for developments.
“We see a strong gap in the market for a more pragmatic finance solution,” he concluded.
