Non-banks

<html><body>Non-bank funders are looking to lend to apartment developers whose project starts were stalled across Melbourne during the pandemic.

"We are seeing the savvy developers doing what they can now to get their projects moving," Wingate managing director (property) Mark Harrison told Nine Entertainment.

But Harrison confirmed "a real distinction" between investor and owner-occupied product.

"The owner-occupier market is quite strong and we are funding quite a bit through the middle and inner-ring suburbs, driven by downsizers and people making lifestyle choices."

The big banks are mostly absent from the market, given their policies on pre-sales.

Pallas Capital chief investment officer Dan Gallen noted the banks often still had a requirement for onerously high levels of pre-sales.

"The banks have not moved with the times," Mr Gallen said.

"Developers are left in purgatory," he added.

Pallas Capital has extended $700 million of apartments across the major capital cities over the last three years, mostly via first mortgages, targeting upmarket developments in suburbs Malvern and Brighton in Melbourne.

"The market is certainly there, especially in the owner-occupier space," Mr Gallen said.

"We have had $150 million of loans repaid in the last three months from developers able to sell product."

The article noted MaxCap Group founder Brae Sokolski indicating its client developers were taking a position on the demand picture in 2022 and 2023.

"If net migration returns, we feel there will be a chronic housing shortage that will work in favour of developers with completed projects."

Sokolski noted funding conditions were especially working in favour of inner-city boutique developments, led by owner-occupiers.

MaxCap is backing the $45 million One Wilson Avenue project in Brunswick, consisting of 41 apartments being developed by Neometro and Milieu.</body></html>

Pallas Capital has had $150 million of loans repaid in the last three months from developers able to sell apartments

jchancellor

Non-bank lenders triggering apartment project restarts across Melbourne

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A non-bank finance group is making a pitch to mortgage brokers, hoping to double its clientele in the wake of the Royal Commission and predicted change of federal government.
Chifley Securities’ Principal Dominic Lambrinos said that its current lending to developers and landowners extends to $2 billion and it works with 3,000 brokers.
Lambrinos said it wants to double the number of brokers it works with over the next year.
“There are more than 10,000 mortgage brokers across Australia and many of them will not have a viable business or career if trail commissions are phased out,” he said.
“Shorter term lending by non-banks like Chifley Securities provide upfront commissions of up to 1 per cent, with this to rate to be paid again when the loan rolls over.
Lambrinos said the company pays commissions on loan it provides, as well as settlements in up to two weeks, incentives for referrals and training.
“Mortgage brokers can make an easy transition to commercial property lending through our training &amp; support programs and gain another income flow, which sadly I expect will be required with the expected changes to trails,” he said.
“We are also seeing an explosion in the number of private investors entering the market, especially large and small foreign funds, which are keen to finance projects and prepared to work with Chifley Securities and it’s brokers to gain access to this asset class.
“This is creating a pipeline of loans which brokers can tap into by diversifying from their traditional mortgage base.”
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