Property Developer Podcast
93 - Construction finance essentials in a dynamic market
With escalating build costs, delays obtaining materials and softening property values the development sector is once again facing a raft of challenges that are effecting the bottom line. This volatility and uncertainty is having an impact on finance and lending with variations to time and cost quite common.
So how is this affecting the lending markets and what sorts of responses are lenders putting in place to protect themselves and their clients? Let's discuss all this and more with previous guest Fabian De Marco from Commercial & Construction Capital.
We cover:
- changes in private capital markets
- lenders reviewing /adjusting maximum loan to value ratios
- length of loan terms being reviewed/shortened
- interest rates changing from fixed to variable (not seen in the last 3-4 years)
- some lenders increasing percentage of contingency funds required
- the listed builder on a project is under more scrutiny from lenders than ever before
- feasibilities may no longer stack up so what are developers doing in this situation?
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