Changing times and moving markets create opportunities for developers. High demand with tight lending restrictions, supply constraints and inflationary pressures move markets.
A lot is being made of the current market conditions and the impact that this is having on development projects as well as the overall demand for housing. While these conditions are no doubt challenging, smart developers are navigating through these headwinds and the flexibility and offerings by non-banks are allowing them to do this.
The demand for affordable new-build housing remains - and this need will likely grow. We have an existing supply issue (that will only increase with developments not proceeding), a backlog of first home buyers and borders re-opening. Supporting this are the policy settings that promote this market such as favourable planning regulations.
This all means affordable new build housing opportunities are there to be explored, and non-bank lenders offer a number of tools that can give developers the confidence to proceed and realise these opportunities. Non-banks will fund a higher percentage of costs than main banks and often with limited or no pre-sales. Versa has funded a number of projects with limited or no pre-sales, allowing projects to get off the ground and give the market confidence that the project will be completed. Close to 80% of Versa’s development loan book is now pre-sold and the majority of these pre-sales were achieved after the project commenced.
Versa is currently funding 250 townhouses and will continue to support this sector of the market with loans from $3m - $40m.
Our recent transactions include:
$26m development facility for a 44 townhouse development in West Auckland
$17m development facility for a 32 townhouse development on the North Shore
$21m land facility in South Auckland
$25m development facility for a 57 townhouse development in West Auckland
$16m of development facilities for one client across 4 separate projects
$13.5m development facility for a 32 townhouse development in West Auckland
We back ourselves to move swiftly and connect developers with the capital they need to get their project moving. We then work proactively alongside them to ensure a successful project is delivered.
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