by Fiona Roberts, Chief Operating Officer, IBN Direct: Alternative Funding Solutions
Appearing originally in the Urban Developer magazine, Issue #91, Sept/Oct 2014
Units and townhouses are the property market ’s new ‘Little Black Ad-Dress ’, netting premium returns and 70 per cent funding options , leaving Aussie dream homes sitting on the rack.
Private lenders – high net worth families, superannuation funds and managed investment schemes – are financing the growing demand for high
density housing without a single pre-sale.
Scott Roberts, whose alternative funding company IBN Direct sources private investors, said apartment popularity was simple: units were in fashion and moved fast.
“I have lenders that just won’t finance houses,” said Mr Roberts, whose national business – based on the Sunshine Coast – has access to up to 200 private funders nationwide.
“And that’s because units and townhouses are easier to sell – the stock turns over quicker.”
He said while houses were still the ‘Australian dream’, the unit market was not only an easier point of entry for new owner-occupiers, but for first-time developers as well.
“The biggest selling points for us is that everyone has been conditioned by the bank that they need pre-sales and that is our big point of difference,” the 46-year-old said.
“But when you’re building townhouses many of our funders do not require any pre-sales compared to banks which will require up to 100 per cent pre-sales to have 100 per cent of their risk covered.
“And when the developer doesn’t need to sell off the plan, buyers will pay a premium price because they’ve been able to walk into the unit, go out on the balcony and take in the vista – and virtually every unit these days has a view of oceans, rivers, cities or mountains.”
Mr Roberts, who was a state manager of a leading aggregator before starting IBN Direct 10 years ago, said private lenders were plugging the finance gap as the major banks knocked back an average of eight out of every 10 development deals that landed on his desk.
“We had one case where a developer with a multi-level project near the Brisbane CBD – who had a nod and a wink from their bank that they would fund the deal – started the project themselves only to run out of money and have the bank change its mind,” he said. (more…)
As Gold Sponsor of the MFAA Queensland, IBN Direct are hosting a table at the 2014 Economic Outlook Lunch on Tuesday, 9th September 2014.
Being held in the Portside Wharf complex on the banks of the Brisbane River at Hamilton, the lunch will feature guest speaker Stephen Koukoulas. Stephen has an extensive economic background and will offer a rare insight into top line economic trends that will impact the Australian economy and also delve into housing affordability.
Stephen, also known as “The Kouk”, has presented around the world, speaking to Money Managers in over 35 central banks. He has been a Senior Economic Advisor to the Prime Minister and the Chief Economist to two major banks and he regularly appears in the media for the ABC, Sky TV and various radio programs.
The event, which includes a two course lunch and beverages, will also feature a MFAA Marketing updated form Stephen Hale, Head – Marketing & Communications, covering the great new MFAA Marketing initiatives now available to members. Information and registration for the lunch is available by clicking HERE.
IBN Direct: Alternative Funding Solutions is proud to announce Exclusive Gold Sponsorship of the Mortgage and Finance Association of Australia (MFAA) in Queensland for the 2014/2015 fiscal year. The MFAA is the peak national body providing service and representation to over 10,000 professional credit advisers (mortgage and finance brokers, mortgage managers and aggregators) to assist them to develop, foster, and promote the mortgage and finance industry in Australia.
As long term supporters of our business, we are thrilled to be partnering with the MFA in what promises to be one of our most exciting years yet!
IBN Direct: Alternative Funding Solutions were proud GOLD Sponsors of the UDIA National Congress in Brisbane last week.
At our stand in the Exhibition Hall we had some fantastic prizes up for grabs – a set of Adams “Tight Lies” golf clubs, a bottle of Bollinger and a remote control Ferrari!!
And the winners are…..
Golf Clubs – Kelly Walsh, Rivergum Homes Group
Bollinger – Mark Brady, SSKB
Remote control Ferrari – Andrew Perkins, Oliver Hume Real Estate Group
Our team enjoyed meeting the many Congress delegates and hosting one of the Study Tours to Hamilton – An Urban Renewal Destination.