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Non-bank lender Chifley Securities says its record growth over the last 12 months has been the direct result of tighter regulatory conditions on Australia’s banks.
Chifley Securities this week revealed that it has seen record levels of loan applications worth $1.1 billion for the 2016 calendar year.
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The second half of the 2016 calendar year saw Chifley lift its lending to property developers and investors by 140 per cent over the previous corresponding period.
The group now has $880 million in current loan applications for projects, with loans ranging in size from $5 million to $60 million in first mortgages, land banking and construction finance.
The non-bank highlighted that it is seeing strong demand from commercial and residential property developers who do not fit the banks’ new lending criteria, which has recently been tightened by APRA.
“We are witnessing property developers being squeezed by very restrictive loan-to-valuation ratios now being imposed by the major banks,” Chifley Securities’ principal, Joe Morello, said.
“Meanwhile Chinese property developers and owners are also being squeezed by new foreign capital outflow restrictions being imposed by the Chinese government, presenting a great opportunity for second and third tier lenders to fill the vacuum,” he said.
The group is targeting lending in calendar 2017 of $1.5 billion for commercial and residential property projects in cities and regional centres across the Eastern Seaboard, with the majority being undertaken in western Sydney.
“2017 will be a year of managing the continuing growth in our lending as we are currently being approached by both large and small developers who are getting caught in the banks’ tighter lending policies,” Mr Morello said
“We are seeing growing demand for lending commercial finance at 65 per cent loan-to-value and demand for construction finance reflecting terms which were previously accepted by the big four banks,” he said.
Mr Morello added that investors funding the deals, including high net worth individuals, private equity and superannuation funds, received an average return of 10 per cent over the last year.
[Related: Chinese borrowers boosting non-bank volumes]
