Non-bank lender Chifley Securities said it received loans worth $1.87bn in the last calendar year, up from $1.1bn in 2016. While about 98% of its loan applications came through the third-party channel in 2016, the proportion of broker-originated loans declined to 94% last year.
Chifley told Australian Broker that it expects the share of broker-originated loans to go down to 90% in the next couple of years, amid what it sees as a strong trend of developers going direct to the company.
The company said its lending business to property developers and investors grew by 15% in the second half of the year over the previous corresponding period, with a $282m contribution from its recently launched Chifley Aggregation.
This was significantly lower than the 140% growth it recorded in the second half of 2016 over the previous corresponding period, as reported by Australian Broker in March last year.
Chifley Securities’ principal, Joe Morello, said the company is seeing strong demand from developers who are holding residual apartments that have not sold or settled on completion.
“Many more apartment buyers are not settling on their off-the-plan purchases, and developers across the East Coast have decided to hold the stock and rent out the apartments instead of selling them at a discount,” he said.
Morello said the non-bank lending sector is gaining recognition among developers and landowners – many of whom are being “neglected” by the major banks as a result of tighter credit controls.
The company said its new aggregation division is experiencing robust demand from brokers who can no longer access funding from the major banks and who have limited access to private lenders.
It expects to see strong demand for non-bank finance solutions as major lenders continue to tighten their lending criteria.
“There are large groups across the property sector that are now off-limits to major lenders, despite the fact that many of the projects are viable and backed by strong equity and balance sheets,” said Morello.
Chifley also sees opportunity for second- and third-tier lenders to fill the void as Chinese property developers and owners continue to be squeezed by new foreign capital outflow restrictions imposed by the Chinese government.