GPS Pipeline Update | May 2025

From Richard Woodhead, GPS Investment Fund Limited Managing Director

Good things come to those that wait.

Over the last couple of years we have seen extraordinary growth in housing prices, with sellers taking advantage and buyers still seeking out property in our beautiful sunshine state. This has led to all GPS projects selling rapidly and loans repaying on time or before maturity.

As the market starts to settle, as we all expected it to, those housing prices will need to reach an equilibrium between sellers and buyers’ expectations and/or affordability.

While this recalibration is occurring, selling of new product will slow down. This is what GPS is seeing through our projects at the moment.

However, its important to note that the fundamentals of the housing market are still strong. There is still an undersupply, immigration and the Olympics putting pressure on our housing market, so we are confident that product will still sell, it’s just adjusting all expectations after the COVID boom.
GPS has seen a similar recalibration many times before, so we know what to do.

There are 2 key ways that we handle this:

1. Extensions. We know these can come across as a bad indicator for a loan, but that is not always the case. The current extensions that GPS has in place are for loans nearing the end of construction, that are seeing this slight lag in sales. GPS being flexible with these extensions not only builds rapport with the developer, it allows our investors to continue to earn a great rate in a falling interest rate market. This also allows developers to make different finishing touches to their projects to better appeal to the local market. One experienced developer has specifically not sold any apartments so that he could watch the local sales, and modify his apartments to maximise the sale price!
2. Residual Stock loans. These loans are not new to GPS and allows us to retain security over the completed product until the loan is repaid all without the construction risk! These again give the developers the ability to maximise their sale prices.

So don’t be alarmed when you see loans taking a little longer to sell down at the moment. We are not only aware, but actively implementing solutions.