Considering the deepening of the credit crunch for construction lending, my current priority is for smaller loans in the $3 to $6 million bracket.
I am finding that sales rates for these projects are better compared with larger projects.
Better sales rates assist in minimising the impact of the credit crunch on average loan terms.
Smaller projects also appear to have fewer valuation issues and residual stock facilities at reasonable interest rates are more readily available. This is due to the limited number of units which need to be refinanced, making the new serviceability rules easier to achieve.
GPS still offers such facilities at a sub 10% interest rate.
Interest rates, fees and charges on larger loans are becoming even more expensive as they need to be priced on longer loan terms to deal with slowing sales rates.