DEVELOPMENT FINANCE
Finance your next development project.
From a duplex knockdown-rebuild to a multi-unit site in Perth's inner east, development finance is a specialist category that requires experience, the right lender relationships, and a broker who understands how construction funding works from the ground up.
Development finance is structured around what the project will be worth when it's finished — not just what it is worth today.
Development finance refers to lending specifically structured for property development projects — typically subdivisions, duplex or triplex builds, townhouse groups, or larger multi-unit residential developments. It is different in almost every meaningful way from a standard home loan or investment property loan.
Where a standard loan is assessed against your personal income and an existing property value, development finance is assessed against the projected end value of the completed project (the Gross Realisation Value, or GRV), your development experience, the viability of the project, and in most cases the level of presales achieved. Funds are drawn down in stages as construction progresses, not advanced in full at settlement.
Development finance is provided by a relatively small group of lenders — typically second-tier banks, non-bank specialist lenders, and private financiers. Allan has established relationships with the lenders who do this work — and the experience to position a development application correctly from the outset.
What development finance covers.
Duplex and triplex
Two or three-dwelling developments on a single lot. Typically the entry point for residential development in Perth, often in inner suburbs with a knockdown-rebuild. Strong lender appetite when structured correctly.
Townhouse groups
Four to twelve dwelling developments. Requires more detailed feasibility, often involves a registered builder under a fixed-price contract, and may require presales depending on the lender and loan-to-cost ratio.
Land subdivision
Subdividing a larger lot into two or more titled lots. Finance is available for the subdivision costs and holding period, with the expectation that lots are sold upon titling.
Knockdown-rebuild
Demolishing an existing dwelling to build new. Can be structured as a construction loan for owner-occupiers, or as a development loan for investor-developers building to sell or rent.
Multi-unit residential (12+ dwellings)
Larger developments typically require a more complex lending structure — often a senior debt facility, sometimes with mezzanine or equity components. We work with specialist lenders and connect you with the right advisers for larger capital stacks.
Commercial or mixed-use
Developments combining residential and commercial elements. Assessed differently and requiring specialist lenders. We assess viability and connect you with appropriate funding sources.
How a development loan is structured and drawn
Feasibility and land acquisition
Before finance can be arranged, the project needs to demonstrate commercial viability — purchase price, construction costs, professional fees, and holding costs versus projected GRV. If you haven't done this yet, we can point you toward the right people.
Formal loan application
We prepare and lodge a formal development finance application, including the feasibility, your development experience, builder details, council approvals, and in some cases presales contracts. The stronger the package, the better the outcome.
Valuation and credit assessment
The lender appoints a valuer to assess the project's end value, and a quantity surveyor (QS) to independently verify construction costs and the draw schedule. This process typically takes 4–6 weeks for straightforward projects.
Drawdowns during construction
Rather than receiving all funds at once, you draw down in stages — typically tied to construction milestones (slab, frame, lockup, fixing, practical completion). Each drawdown is subject to a QS inspection to confirm the work has been completed.
Exit — sale or refinance
Development loans are short-term by design — typically 12 to 24 months. The exit is either the sale of completed dwellings, or refinancing into investment loans if you plan to hold. We plan the exit strategy from the beginning, not as an afterthought.
Development finance without the jargon.
Before we approach a lender, we ask these questions
Not every development deal is financeable — and not every deal should be done even if it is. Allan takes a practical view. Before engaging any lender, he works through the following with every development client:
This isn't a gatekeeping exercise — it's due diligence. The lender will ask all of these questions. We'd rather work through them with you first.
Frequently Asked Questions
How much can I borrow for a development project?
Typically 65–70% of Gross Realisation Value (end value), or up to 80–85% of total project costs depending on the lender and structure. The balance needs to come from your own equity or equity in the land. Second-tier and private lenders sometimes go higher, but at a cost to the rate. We model the right structure for your project.
Do I need presales to get development finance?
It depends on the project size and lender. For smaller projects (two to four dwellings), many lenders will proceed without presales if the feasibility is strong and the developer has relevant experience. For larger projects, presales are typically required — often enough to cover 100% of the loan amount. We advise on what's required before you spend time chasing contracts.
How long does development finance approval take?
Longer than most borrowers expect. Allow 8–12 weeks minimum for formal approval on a straightforward project — longer if there are title, planning, or documentation gaps. We push the process hard, but lenders and valuers set their own timelines. We're honest about this upfront.
Can I use development finance if I've never developed before?
Yes, but your options are more limited. Most lenders want to see relevant experience — either in development itself, or in the construction industry. First-time developers can access finance, but typically at lower loan-to-cost ratios and with more stringent conditions. A strong builder on board and a clean feasibility help significantly. We assess your position honestly.
Frequently Asked Questions
How much can I borrow for a development project?
Typically 65–70% of Gross Realisation Value (end value), or up to 80–85% of total project costs depending on the lender and structure. The balance needs to come from your own equity or equity in the land. Second-tier and private lenders sometimes go higher, but at a cost to the rate. We model the right structure for your project.
Do I need presales to get development finance?
It depends on the project size and lender. For smaller projects (two to four dwellings), many lenders will proceed without presales if the feasibility is strong and the developer has relevant experience. For larger projects, presales are typically required — often enough to cover 100% of the loan amount. We advise on what's required before you spend time chasing contracts.
How long does development finance approval take?
Longer than most borrowers expect. Allow 8–12 weeks minimum for formal approval on a straightforward project — longer if there are title, planning, or documentation gaps. We push the process hard, but lenders and valuers set their own timelines. We're honest about this upfront.
Can I use development finance if I've never developed before?
Yes, but your options are more limited. Most lenders want to see relevant experience — either in development itself, or in the construction industry. First-time developers can access finance, but typically at lower loan-to-cost ratios and with more stringent conditions. A strong builder on board and a clean feasibility help significantly. We assess your position honestly.