Private Loan Lenders Supporting Construction Industry In Australia
Life, and business, is cyclical; there’s no escaping that. And the greatest examples of this are generally found in the financial and real estate industries. Some say that if real estate is up, stocks and shares are down, and vice versa. And for every boom, there must be a bust!
If only life was that predictable! One thing is for sure, though, our financial and investment markets are constantly changing, and it doesn’t pay to sit still and do nothing.
Let’s take the construction industry. Just a few years ago the industry was in dire straits; so much so that thousands of construction workers had no choice but to head to the mines for work.
Brighter Future For Construction
Now look at us; with a significant fall in commodity prices, Australia’s resources market continues to be hammered, with many of those workers losing their jobs.
The good news, however, is that Australia’s construction industry is getting back on its feet, and the future is looking optimistic and strong. This is not only a major positive for construction workers, but also for those invested in construction and development.
The boost of investment in the residential construction sector is largely being driven by foreign investment in the Australian property market.
Of the 2.1 million actively trading businesses in Australia, construction businesses are the most common, according to the Australian Bureau of Statistics. However, research also suggests that banks are less than keen on business lending (May 2016) and that is generating increased business for private loan lenders.
In fact, according to one report, 62.5% of those surveyed rated bank competition as ‘weak’ or ‘very weak’.
Funding Creates Investment Options
As the demand for private construction industry funding increases so, too, do the number of excellent mortgage investment opportunities, available through long established companies, such as Credit Connect Capital Ltd.
The non-bank business lending sector is thriving, as it is increasingly seen as more accommodating, more flexible and certainly more business-driven than the banks.
Here’s a good example from Credit Connect Capital Ltd. A developer borrowed $6,682,000 towards the $12,150,000 purchase of 5 adjoining properties in the Sydney suburb of Bankstown. The loan term was 12 months, and the project was to build 60 units.
Smart Investment In Bankstown
The developer was certainly on the money. As of June 2015, the median house/unit valuation in Bankstown was $155,843 higher than New South Wales as a whole. This was down to the desirability of the area, and proximity to major employment.
Bankstown’s population is forecast to grow from 206,355 in 2016, to 243,050 by 2036. Clearly, then. the demand for housing will also grow, making this developer’s project well planned and well timed.
By loaning the developer the money for this project, Credit Connect Capital was then able to offer its investment clients a very solid opportunity, where they would see a 9% return on their investment. More importantly, this investment was fully secured by real Australian real estate.
Secure Investment Opportunities
Compare this ROI to a term deposit at 3% or less, and it’s easy to see the attraction of Credit Connect Capital Ltd to both borrowers and investors.
Credit Connect Capital offers a range of private loan options, including commercial loans. Ranging from $50,000 to $50,000,000 — provided the borrower has property to offer as security — this is an ideal loan for shopping centre developments, industrial developments, vacant land acquisitions, or refinancing.
This is proactive lending, aimed at boosting Australia’s economy, providing jobs, and offering sound opportunities to investors.