Alternative Lenders Rush Into Property Market Down Under

PHOTO: Residential buildings and houses in Sydney, Photographer: Brendon Thorne/Bloomberg

Australia’s property market is seeing non-bank debt providers step in to plug a hole in funding left by big banks, whose lending is being hobbled by increased regulatory pressures and higher capital requirements.

The pull-back by banks leaves a gap in funding needs that’s expected to increase to A$50 billion ($35 billion) by 2023, according to MaxCap Group, an Australia and New Zealand commercial real-estate debt specialist. Melbourne-based MaxCap has more than A$2 billion of deals that it will fund in the next nine to 12 months, and recently arranged a A$360 million construction loan for a Brisbane office redevelopment project.

“The alternative lending opportunity for the non-bank sector is growing quite rapidly,” said Wayne Lasky, founder and managing director at MaxCap, which has A$3.98 billion under management. Some large transactions in the real estate market, which might have traditionally been financed by the big four banks, have taken place recently by non-bank credit providers, he said in an interview.