Brokers with developer clients in Western Australia have a new funding option that removes a common hurdle in construction lending: pre-sales.
Australian Finance Group (AFG), the ASX-listed aggregator, has added RAC Finance to its commercial lending panel of more than 80 lenders and partners. Its brokers can now access development loans of up to $10 million for eligible projects in metropolitan Perth and selected parts of the state’s South West.
The move targets projects that struggle to meet mainstream construction finance criteria, particularly where developers can’t secure enough pre-sales to satisfy a lender.
“Development finance is a specialised area of lending and every project is different. Brokers need access to lenders that understand local market conditions,” said Mark Hewitt (pictured left), general manager of industry and partnerships at AFG.
RAC Finance lends across projects ranging from single homes and townhouses through to apartments, industrial sites, and land subdivisions. It also offers flexible loan terms and accepts owner-builder applications.
A WA-based property finance team handles approvals and progress claims, with progress payments processed within 48 hours.
RAC Finance general manager Michael Patino (pictured right) said the lender “has been supporting local developers for over 30 years” and that the partnership opens a more straightforward, local funding route for developers.
Perth has held up better than most capitals. Dwelling values in the city were 10.1% higher over the year to September, according to Cotality’s Home Value Index, even as national values were flat over the same period.
The state’s development pipeline is also holding up better than elsewhere. Dwelling approvals in WA rose 3.2% month on month in August, with private house approvals up 8.6%, while Queensland and New South Wales recorded sharp falls, according to the Australian Bureau of Statistics.
Hewitt said the addition also strengthens the range of specialist commercial finance options available through AFG.
“For brokers, greater lender choice means more options for clients and more commercial opportunities,” he said.
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