With the country chasing an ambitious national target of 1.2 million new homes over the next five years, developers turning over an average three new homes a year say they could play a much bigger role in boosting supply, especially in urban infill areas.
The sector of smaller players that creates 16,000 homes a year nationally could triple that figure, said Rob Flux, the founder of Property Developer Network, an industry group.
But in addition to inconsistent and slow planning processes, which large developers say challenge the rollout of new housing, smaller developers also struggled with unwilling lenders and higher financing costs, Mr Flux said.
“We could easily create 50 per cent of the stock that’s needed, given the amount of housing stock that our community is already creating,” he said.
“But most banks don’t want to deal with small-scale projects, so our developers are struggling to get finance.”
A poll by CrowdProperty Australia, a lender to small-scale developers, found that getting project finance was the biggest hurdle, preventing 56 per cent of such developers from building more homes.
Raising equity was the second hurdle, affecting 37 per cent of developers, followed by the price of properties at 34 per cent.
This is an extract from an article written by Nila Sweeney for Australian Financial Review, published on 24th September 2023.
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Read the full story: Small developers hampered by financing and planning hurdles - Australian Financial Review
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