With interest rates rising and building/land acquisition costs still high, you may have already experienced the pull back from banks, or other funders not being able to meet Progress Draws on time, or in full. As projects experience delays, funders with less experience or more aggressive lending approaches have struggled to meet their finance requirements.
That is not the case for GPS.
This month GPS turns 30! That’s 30 years of private lending experience, and there have been lots of industry and economic changes that we been through over those years. Through everything thought, we have met 100% of our progress draws with no need for our borrowers, or their builders, to worry about where the money is coming from. This has always been the key aim of GPS and we could not be prouder that we continue to deliver these results.
The other benefit of being in the industry for 30 years is the experience that we can use to foresee (to some extent) what the market might continue to do, and, therefore, how GPS can adjust to ensure we remain competitive and commercially viable.
The housing crisis that we are experiencing in South East QLD is the current talking point. What we see from our end is that increased demand, due to immigration, joined with reduced supply, due to rising costs, is going to continue to result in fewer larger projects.
Our predictions based off the current trends are:
- Immigration will continue;
- Building prices will continue to rise;
- Site costs as a percentage of total development costs, will decrease as we may see some distressed sales;
- Successful new residential development projects will require strong relationships between developers, builders, and funders who work together for a successful outcome;
- Undersupply will get worse; and
- Inflation will continue to rise.
Doesn’t sound awfully positive, does it?
The flip side to this is that the demand is there. We used to see projects that would have delays at the end waiting for sales, now buyers are pushing for faster settlements. As is said in the classic movie, Field of Dreams (1989) “if you build it, they will come”. The demand is there for the product and with a flexible lender such as GPS who can produce commercial outcomes. We can work with you to produce the product.
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