The lending landscape has changed drastically over the past few years. Private lending is slowly but surely becoming more popular, allowing everyone to gain financing when required. A private lender is a business, group, or an individual who allows a customer to borrow money. The borrower is usually someone who may not be approved the conventional way. Some typical reasons include deficiencies in credit and income.
A great deal of attention is focused on the property development sector, and with good reason. Developing property is an excellent way to improve an area while making a healthy return on your investment. Additionally, the construction industry is active. And although the massive housing price increases seen across the country are stabilising, housing is very much in demand.
Recently, we have seen a booming seller’s market in Australia. Home prices have reached highs property owners would never dream possible. This, of course, has sparked ongoing concerns about a housing bubble on the verge of bursting.
The recent rise in interest rates makes many people in the property industry tense. After years of historically unprecedented price growth across Australia, the increasing rates to combat inflation have tempered prices. This leaves people wondering what to expect for the balance of 2023.
Let’s start by understanding what exactly construction finance is. In its simplest form, it’s a loan for those who need financial assistance for development, building a home or doing renovations. It differs significantly from purchasing an established property, of which the type of loan to apply for is a home loan.