AFR Article – Non-bank lenders cut risk as market share grows

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Research undertaken by Ashurst has confirmed that non-bank lenders are reducing their LVRs, which have fallen from 72% in 2017 to 65%.

Ken Nguyen of Ashurst states, “What we’re seeing in the last 18 to 24 months is lot of the non-banks move in a much more institutional direction, tying themselves to institutional money from the likes of local super funds and overseas institutions.”

The analysis from Ashurst reveals that the top four banks have reduced their exposure to residential development finance from $5.2b in late 2016 to $2.3b in mid-2019. This is supported by APRA Quarterly ADI Property Exposures evidencing that development finance limits have reduced from $21.4b in June 2018 to $18.8b in June 2019. The banking limits for development finance were as high as $24.9b in March 2017.

BPFM focuses solely on providing first mortgage development finance with a targeted maximum 65% LVR. Our specialist property finance team have a strong understanding of risks associated with development finance and provide a tailored funding package to experienced developers.

Read the full Australian Financial Review article here.

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