Where next for the Development Markets ?
Over the past few years, the Australian development market has been severely hit by the credit crisis by the reduction in primary lenders and also the remaining banks appetite (or sometimes lack of it) to fund anything that they deem to be “risky”.
“Risky” has taken on a whole new meaning in the last few years and as we’ve talked about before you could have the best site in town, with an award winning design and 100% pre sales – but this in some instances still proved too risky for the banks in an uncertain market going forward.
To be fair to the banks, we are seeing increased lending activity in some sectors of the market, generally not large builds but certainly in the up to $20m market and more recently to a limited extent in the $20m to $100m sector with some isolated builds over $100m, so some of the banks, at least seem to have a developing appetite for deals.
A significant issue raised by a number of banks, is the quantum and quality of equity being put forward by developers with lenders wanting to see “real dollars” as a means of mitigating their risk further. Continue reading
If you’re not properly insured … then it will be a real disaster
Damage to property and buildings by fire and other disasters, natural or otherwise, costs Australians hundreds of millions of dollars every year. In the last year this has been even more defined by the recent floods in Queensland and Victoria.
Notwithstanding the substantial number of properties that suffered as a result of the recent floods, the most common building disaster in Australia is fire, so it is important to be prepared. Luckily we have only had one earthquake in recent history and although the chances of these occurrences are low, the devastation they can do has been clearly seen in Christchurch. Continue reading
