Looking beyond the spreadsheet

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While most of the team at GPS are glued to the spreadsheets on their screens, I remain old school to work the GPS loan pipeline. I have it all up on a white board in my office.

The main reason for doing this is that it illustrates a bigger picture of the current market.

Numbers do not mean much unless you fully understand the GPS business, so I will put it into perspective by simply noting that it would take GPS over a year to work all loans through to settlement. This is the strongest loan pipeline I have seen in my 20 plus years in the industry.

Some other anecdotal evidence is that:

  • Borrowers are now talking to me a lot earlier in the project’s life and seeking lender commitment;
  • Relations between operations like GPS are the most cordial I have ever seen as we are not competing with each other for business. We are now working together to increase our efficiencies; and
  • There is no need to discount fees as there are plenty of borrowers who will pay the asking price.

My take on the above is it again demonstrates that the credit squeeze on residential development lending is here. I also believe it shows that the supply of new product will slow dramatically once current projects are completed, which should start to put some heat back into the Brisbane market in 2018.

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