Blog

“Investing in Mortgage Schemes can be a complex business. As one of the few remaining Private Lenders still in business, I have learnt a lot during my 20-plus years in the industry. The intent of these blogs is to pass on some of my knowledge and experience to you.”

Richard Woodhead
Managing Director

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12-18 Hicks Street, Mount Gravatt East 

Mount Gravatt East is a long established residential suburb with all the typical facilities such as public and private schools, universities, parks, medical facilities,...
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Involved in a project where funding is uncertain?

In early 2016, GPS stopped lending while we got our heads around the apartment oversupply issue. We then refocused our lending to avoid types...
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What counts as a sale?

Each GPS loan has a set of construction and sales milestones to assist GPS in monitoring the loan’s status. If the Borrower is not meeting the...
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41 Solomon Avenue, Loganholme

Richard and Marnie visited the site at Loganholme on 20th July. As part of GPS’s education process, Richard walks all staff through how to complete a...
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The return of the banks

So when are the banks expected to re-enter the residential construction and development market in Brisbane? My thought process on this topic is: APRA...
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Open for new applications

Despite the media hype about oversupply in the Brisbane market, projects funded by GPS continue to sell their product. We have a number of...
The sun sets on Brisbane’s skyline of cranes, soon the market will be in under-supply.

Say goodbye to the cranes

Investors frequently ask me to comment on media articles, and so I thought I would get ahead of the game with the latest topic:...
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27 Arafura Avenue, Loganholme

On the Wednesday 5th of July, Bruce and Jess headed out to inspect the progress at 27 Arafura Avenue, Loganholme (EMI Pty Ltd). They met one...
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The real cost of finance

It never ceases to amaze me how some borrowers are fixated on interest rate, but are blind to the overall cost of finance. When...
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Time for smaller projects

GPS has currently seen an influx of applications for 20-plus unit and townhouse developments. Pricing for such loans is currently at a premium, due...
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Retirement? – No way

The question I am most frequently asked comes out more as a statement along the lines of “you are not thinking about retiring anytime...
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11 Collins Street, Nundah

The project at 11 Collins Street, Nundah (Joseph K Corp Pty Ltd) is progressing well. To date the project has exceeded its construction milestones...
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Setting a cap on lending

The apartment oversupply question in Brisbane continues to be a talking point. In reality it is more of the same. There cannot be too...
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Considering GPS? The time is now.

In October 2016 I wrote an article (Our Niche Product) about how GPS operates in a niche market for the mutual benefit of investors...
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Now officially….GPS Development Finance Pty Ltd

Those who read our newsletter may already know us as GPS Development Finance, but up until recently the name of our operating company was GPS Managed...
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Sub-contractors bearing the brunt of builder collapses

There has recently been a spate of builder collapses, with more expected over the course of 2017. Builder failure risk has moved up the...
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Bad News Sells

In this digital age of media where it is all about how many clicks you get, balanced commentary has become secondary to bad news...
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584 & 588 Boundary Street, Spring Hill

On Wednesday 8th March Bruce, Ben and Jess headed over to the project at Boundary Street, Spring Hill (just a short walk up the...
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When it all goes wrong

Brisbane is now in a sector of the property cycle which will test all involved in residential development. We have seen the failure of...
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Looking beyond the spreadsheet

While most of the team at GPS are glued to the spreadsheets on their screens, I remain old school to work the GPS loan...
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217A Lutwyche Road, Windsor

The project at 217A Lutwyche Road, Windsor is nearing the end of construction at 83.95% complete (as at 13 February 2017). The crane has...
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Oversupply: Fact vs Fiction

Oversupply of residential units in the Brisbane property market is currently a large concern for many Lenders and Borrowers. When looking at sites to...
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Looking into the crystal ball

It is that time of year when, if you are brave enough, you make predictions for what 2017 has in store for us. Based...
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The Day the Presales Died

This time last year GPS stopped lending while we reviewed the apartment oversupply issue. The view we formed was that: Availability of construction finance...
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The next step for our Next Generation Program at GPS…

At GPS we focus on our Next Generation Program because we know how important it is to pass on skills, knowledge and expertise to...
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Development finance in 2017

Ten points about the direction of lending by GPS in 2017. The potential for an oversupply of apartments in the inner Brisbane renewal area...
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Watch, learn and show restraint

As the banks are unlikely to broadcast their plans, I continue to watch and learn from what they do, rather than listen to what...
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15 Besham Parade, Wynnum

As at the date of our Quantity Surveyors’ site inspection on 19 October 2016, construction for the project by Besham No. 1 Pty Ltd...
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The market is speaking and we have to listen

The nature of loan applications currently coming over my desk indicates that a credit crunch has begun in the residential construction lending market. It...
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Open to additional investment

In early 2016 GPS took a conservative approach and slowed down lending while we digested all the speculation of an apartment oversupply in Brisbane....
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75 Waverley Street, Annerley

Construction at 75 Waverley Street, Annerley is nearing halfway, currently at 40.77% complete. As of 29 August 2016, the piling and basement carpark slab...
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The importance of building a relationship with your lender

The current market for development financing has highlighted the need for developers to again establish solid working relationships with funders. Banks have pulled back...
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28-36 Winstanley Street, Carina Heights

The project at Winstanley Street, Carina Heights, from borrower SJAD Constructions Pty Ltd, is progressing well. As of 11 August 2016, the site has...
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The current struggle

The horror story continues for developers trying to achieve construction funding. As this is a rapidly changing dynamic, I have conducted some straw polls...
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Winning no awards for photography

As part of GPS’ loan management procedures, Portfolio Managers, and other GPS staff, make regular site inspections. We like to have someone out at...
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15 Percy Street, Recliffe

GPS’ latest loan to settle, Marco Constructions Pty Ltd, is moving quickly, with construction already started on site. Under construction are eight residential units...
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Soft Landing

There will be no silver bullet solution to any potential apartment oversupply issue. Here are five reasons I believe that, if the problem exists...
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The myth of offshore funding

Promises of large tranches of cheap offshore monies for construction lending have always been about. I can recall back to the petrodollars. I have...
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Credit rationing

The latest indication of the growing credit rationing for residential construction development lending is that all four major banks have now put a moratorium...
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13-15 Rawlinson Street, Murarrie

Construction at 13-15 Rawlinson Street, Murarrie, GPS’s newest loan, has kicked off with the demolition of the two pre-existing houses on the property. The...
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The right formula

Due to the current state of other investment classes, I remain of the view that there will be a continuing investor market for residential...
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Pick a lender and run with them

Construction lending is a highly specialised field and is currently hard to obtain. Due to ongoing capitalisation requirements, the banks have either withdrawn or...
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Horror story

In April 2015 I issued a letter of offer for a project (Project A). I was informed that I was too expensive and they...
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The three month rule

Too many developers focus on the interest rate rather than the overall cost of finance. Banks traditionally require presales before construction can commence. Presales...
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A brief history of private lending

Private lending started as solicitor’s trust account lending. Due to solicitors making a dog’s breakfast of the industry we saw the Managed Investments Act...
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75 Waverley Street, Annerley

The Development To be constructed are 22 residential units located within convenient proximity to public transport, shopping, medical and educational facilities. The site was...
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The Loan Pipeline

In the past month I have seen a decline in the number of good quality loan applications across my desk, and a substantial increase...
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The GPS Loan Pipeline

2016 has already been very interesting for the GPS loan pipeline. It appears that the banks are now only serving their long established and...
David Street, Nundah

18 and 20 David Street, Nundah

A meeting was held this morning, the 25th February 2016, with the site foreman, head contractor, contracts manager and borrower at David Street, Nundah....
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Brisbane property market plods along

As always, the start of a new year brings with it predictions for the Australian property market. As can be shown by the graphs...
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22 Onslow Street, Ascot

Progress at 22 Onslow Street, Ascot, as of my visit on 2 December 2015, is moving along really well. The basement slab is almost...
Thank you

Thank You

2014 has been an exceptionally good year for GPS. It would not have been possible without the ongoing support of our loyal Investor and...
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Hybrid Bank Bonds and Banking Reform

Hybrid Bank Bonds The banks are currently in the process of increasing their ratios of capital. Rather than issuing more shares and driving down...
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Investors turn to the web for advice

An interesting statistic which I have picked up (Andrew Inwood – The Australian – 24/06/2014) is that some 67.4 per cent of High Net...
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Market Update

Flat Interest Rates Banks offering five year fixed interest home loans at sub 5% is a clear indication that they believe interest rates are...
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Repeat Borrowers

At the top of my list in selecting projects to be funded by GPS are “repeat teams.” This goes further than Borrowers and includes...
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Financial Advice and Banking Reform

We are currently seeing push back from the large financial institutions over the future of financial advice (FoFA) and the new capital requirements for...
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GPS turns 20 in 2014

Welcome to 2014, the year GPS turns 20. Rather than a year to party the team at GPS are looking forward to a more...
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How Well Do You Know Your Fund Manager?

How Well Do You Know Your Fund Manager? Anyone can lend money but very few can consistently get it all back. The GFC has...
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Risk Vs Return – What Is The Niche?

I do not think that I am delving into the financial advice arena by noting the old adage of “the higher the return the...
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The GPS Business Direction

The GPS Business Direction GFC was the catalyst for GPS to seriously rethink where it was and what it wanted to be. While GPS...
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Mortgage Funds Are Not Property Funds

One of my soap box subjects and pet issues is when GPS is referred to as a property fund. Unfortunately, mortgage funds have had...
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Is Your Mortgage Scheme & Operator Currently Licensed?

In order to operate a Mortgage scheme for Investors the operator needs to hold an Australian Financial Services Licence (AFSL). An AFSL can be...
The Turmoil Test

Mixed Cash & Mortgages Not Worth The Risk

The most common issue I have discussed with clients recently is the falling interest rate on the SBOSA (select business online saver account ie....