Banks are even more increasingly uncomfortable with providing finance terms on site acquisitions that developers want or need – on large sites there’s next to no appetite, on smaller sites the LVR will often be capped at 50% at best, or pulled back to around the 35% mark particularly if the development is not proceeding in the short term.
STAC’s client recently acquired a townhouse site in Brisbane’s inner-south, but with equity still tied up in another project, they needed a higher LVR. The outcome of a 65% LVR meant that a few hundred thousand dollars less was required, whilst a rate still in the single digits (with no line fees) meant that the holding cost was still very reasonable.
