The building and construction sectors are currently the largest direct and indirect contributors to the Australian economy. Recent industry forecasts have revealed the crucial role that building and construction play in rebalancing our economy. As we shift from a reliance on mining and housing to a more service based economy, these sectors have become more and more central. Therefore, the level of building applications being approved can be seen as a good indication of the direction of the economy. For many investors, fortunes can be made or lost based on the rate of building and construction approvals. Official figures for 2015 show that building approvals last year fell even more than expected, while lending to property investors has also decreased significantly over the last year.<\/p>\n
There are a number of factors which have contributed to this unfortunate decrease in building approvals. While government policy and legislation have had a substantial impact on building approvals, the banking system has also had a sizable effect. Finance approvals are an essential aspect of completing developments and in recent months, the first and second tier banking sectors have taken a much more conservative view of finance approvals. This has had a large effect on the building and construction industries in Australia, with many unable to secure the finance needed to go ahead with their project.<\/p>\n
Private non-bank lenders like Chifley Securities have stepped in to provide finance where banks have refused, allowing building and development to go ahead. Chifley Securities and other non-banks offer more relaxed conditions than traditional banks, in order to provide loans to a broader range of borrowers, whilst still maintaining security positions and an acceptable return for risk. Borrowers often may not realise that many of the burdensome conditions imposed by banks, such as onerous presale levels and high equity contributions do not exist at the same levels with third tier lenders such as Chifley Securities.<\/p>\n