It has been a long time since I said these words to GPS borrowers – “hold off on the marketing”. The last couple of years have seen some trying conditions with developers having to put in a lot of effort to sell product.
Borrowers are now reporting increased sales levels and a concern that they are underselling. Where they have struggled to achieve pre-sales, they are finding that the sale rates improve dramatically once construction has commenced.
They are approaching GPS to make sure that we are comfortable with them slowing down the marketing of their projects.
GPS works with our borrowers as part of the team. Once construction has commenced, we are committed to the completion of the project. We also want our borrowers to have successful projects. Successful developers continue in the industry and, hopefully, will be repeat borrowers. Our investors like proven developers.
The team at GPS and I are now having discussions with borrowers about the timing of their sales campaigns, price growth, etc. These are more pleasant conversations than simply nagging borrowers to get product sold.
GPS has extensive knowledge of the residential development market in South East Queensland through being involved in around 30 projects at any one time. We enjoy being able to share this knowledge and experience with our borrowers.
As an example, we know from experience that there are very conservative areas within Southeast Queensland where achieving pre-construction pre-sales is nearly impossible, but that sales will flow once construction has commenced.
In those areas, having a false start by not achieving bank level pre-sales will prejudice the ongoing marketing and potential price uplift for the project.
We are always happy to discuss projects with prospective borrowers. This assists in working out whether it will be a good working relationship. It is important that borrowers enjoy working with us.
Looking for finance? Give us a call to discuss how working with GPS will add value to your development project.
Richard Woodhead | Managing Director – 0427 574 246
Manuel Paraskevos | Business Development Manager – 0415 969 572
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