Securing property development finance quickly and with great terms will give you an edge in the highly competitive Australian real estate market.

It will help you to capitalise on development project opportunities before your competitors can snatch them from you.

Securing your property development finance on the best possible terms will also help you to maximise your return on your investment (ROI). As any good investment adviser will tell you, the bottom line on any property development project should be your ROI.

At DFS, we understand the importance of financing your property development project in a fast, hassle-free way on the best possible terms. We are private lending specialists for Australian property developers.

Become a private lender investor here.

Read The Definitive Guide: How Does Private Lending Work in 2021?

What Are The Advantages of Private Lender Property Development Loans?

  • ✅ No (or minimal) pre-sale requirements.
  • ✅ Minimal documentation requirements.
  • ✅ No credit checks.
  • ✅ Minimal equity/deposit requirements.
  • ✅ No property development project experience required.
  • ✅ Terms and repayment schedules being tailored to project needs.
  • ✅ Fast-tracked approvals and settlements Australia-wide.
shutterstock 130285502 1
shutterstock 130285502 1

Property Development Finance in Australia

Property development finance in Australia (sometimes called ‘construction finance’) is used to build or develop multi-residential properties (like apartment/unit complexes and townhouses) or commercial (business) properties.

In Australia, you have two main options for property development funding. Using a:

1 – Traditional mainstream lender, like a bank such as; ANZNABCBAWestpac, BCU, Bankwest, St George or Adelaide Bank.

2 – Private lender.

4 banks
4 banks

Bank Finance Versus Private Lending Finance

Private lenders have far less stringent lending criteria than banks. This makes the property development finance application and approval process with a private lender much quicker.

For example:

  • Banks typically require a certain percentage of pre-sales for multi-residential unit/apartment complex finance applications. Pre-sales are sales before a building is completed.


  • Private Lenders on the other hand typically require much lower pre-sales for property development finance approval. Some private lenders will even approve property development loan applications with NO pre-sales at all. This gives developers much more flexibility in financing and starting work on their projects.


Pre-sales can be notoriously hard for developers to get “off the plan”. Savvy property developers know that the best way to get sales on a property development project is for construction work to start and to be completed as soon as possible.

Once building starts, buyers can then start to visualise themselves living in a property. Their dreams start to become real. And once a project is completed, the sales process becomes even easier because buyers can move in almost immediately.

bigstock Private Lenders 145033010 scaled
bigstock Private Lenders 145033010 scaled

Private lenders can be a great option for owner-builders and builder-developers because of the less stringent lending requirements.

Private Lender Loans Can Be:

✔️ A great way to get funds quickly to purchase/secure a property for a development project.

✔️ A great source of any additional short-term funds that you need to start a property development project.

✔️ Structured to enable you to withdraw your equity before a project is completed (so that you can move onto your next development project).

construction development
construction development

Property Development Funding

There are two main options for property development funding:

1) the total development costs (TDC), and

2) the gross realised value (GRV).

Total Development Costs

TDC is the total cost of your property development project, including:

  • Property purchase costs.
  • Building costs.
  • Finance interest costs.
  • Property holding costs (like council rates and insurance).
  • Property marketing and sales costs (for example, advertising for tenants).

Some private lenders may be prepared to lend up to a higher percentage of the TDC than others (for example, 90%). The higher the percentage, the less equity (deposit) that you need to provide and the earlier you can start work on your project.

In addition, private lenders are more likely to lend to a higher percentage of the TDC than a bank lender.

bigstock Home And Money Bag Put On The 241434328 scaled
bigstock Home And Money Bag Put On The 241434328 scaled

Gross Realised Value (GRV)

GRV on the other hand is the projected completion value of a property development project (excluding GST). Again, some private lenders may be prepared to lend up to a higher percentage of the GRV than others. Either way, private lenders are more likely to lend to a higher percentage of the GRV than a bank lender.

All lenders tend to be prepared to lend to a higher percentage of the TDC than the GRV. However, it’s also important to understand that the GRV can be significantly higher than the TDC if you will be significantly enhancing the value of a property with your development project.

Savvy property developers know that they can add value to the project by:

✔️ Choosing properties in the right location.

✔️ Building the types of properties that are in high demand.

✔️ Building high-quality properties by using high-quality builders and materials.

✔️ Marketing the property both while it’s being built and after it has been completed.

money bags with moel house
money bags with moel house

Property Development Loans From Private Lenders

Property development loans from private lenders are financed by private companies or private individuals.

Private loan terms for property development projects are usually for periods of up to 2 years.

This term enables construction work to be completed and for the property to be marketed and sold. It also minimises the lenders risk.

Private lenders fund loans themselves, and they are often less conservative about property development project valuations than bank lenders. As any experienced property developer will tell you, property valuations can make or break a property finance development application, especially with a traditional lender.

Private lenders are also less likely to be concerned if it’s your first property development project (or one of your first) than a bank lender will be. Private lenders tend to assess the feasibility of the property finance development itself, rather than your experience as a developer.

Of course, whether you have any property development experience or not, it’s important for both you and the lender that the financial numbers on your project stack up. It’s also important that you have any development approvals that you require in place and that you have your project builders organised if you’re not an owner-builder or builder-developer.

bigstock Real Estate Broker Residential 303817576 scaled
bigstock Real Estate Broker Residential 303817576 scaled

How DFS Can Help With Your Property Development Finance Needs

At DFS, we’ll take the time to understand your specific property development project and your funding needs. We’ll then match you with a suitable lender from our panel of over 200 private lenders. We’re as keen for your property development project to succeed as you are, and we can arrange the funds to help make your development dreams a reality.

Case Study – Property Development Loans in Melbourne

One of our builder-developer clients in Melbourne applied to one of the major banks for property development finance for a multi-residential unit complex. The bank was only prepared to lend up to 75% of the TDC, PLUS they required pre-sales of 50% of the units before they would approve the loan!

Frustrated, the builder-developer approached us at DFS. We were able to secure them a property development loan from a private lender for 90% of the TDC, without the need for any pre-sales!

This not only enabled them to start their property development project sooner, it also meant that they had less of their own funds tied up in the development while it was being built.

They built their development within 18 months and it achieved full occupancy within 6 months of completion. The builder-developer has now moved onto their next project and it’s being funded by the same private lender.

bigstock Construction Worker Shaking Ha 276647932a scaled
bigstock Construction Worker Shaking Ha 276647932a scaled

Case Study – Property Development Finance in Sydney

One of our developer clients in Sydney found a commercial property project opportunity in a highly desirable location. However, they needed funds quickly to secure the property in a competitive buying situation with other developers.

They simply couldn’t afford to wait for a lengthy property development loan application process with a major bank, so they decided to approach us to see what we could do for them.

We immediately understood the urgency of the situation. A delay in the finance approval would mean a lost business opportunity for our client. We worked hard to determine their financing needs and to match them with a private lender who could provide them with the funds they needed quickly and on the best possible terms.

Our client was able to make an offer and secure the commercial property site. Construction of the business premises was subsequently completed within two years and the site now boasts a diverse range of commercial tenants.

Like to find out more?

If you’d like to find out more about how we can help you with a property development loan, contact us online or call us on 1300 94 22 33 for an obligation-free chat. You can then decide whether you’d like to work with us to finance your property development project quickly and hassle-free!

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