Alternative Lenders Rush Into Property Market Down Under
- Banks’ retreat could create $35 billion funding gap: MaxCap
- Australian banks under pressure by higher capital requirements
Residential buildings and houses in Sydney,
Photographer: Brendon Thorne/Bloomberg
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Australia’s property market is seeing non-bank debt providers step in to plug a hole in funding left by big banks, whose lending is being hobbled by increased regulatory pressures and higher capital requirements.
The pull-back by banks leaves a gap in funding needs that’s expected to increase to A$50 billion ($35 billion) by 2023, according to MaxCap Group, an Australia and New Zealand commercial real-estate debt specialist. Melbourne-based MaxCap has more than A$2 billion of deals that it will fund in the next nine to 12 months, and recently arranged a A$360 million construction loan for a Brisbane office redevelopment project.