property development Wollongong

Development finance is released in stages against work completed, not as a single lump sum. The lender is funding a project rather than buying an asset, so the assessment focuses on the feasibility as much as on you.

How the facility is structured

A land or site acquisition component, followed by a construction facility drawn progressively as the build advances and verified by a quantity surveyor. This works similarly to a standard construction loan, but at project scale. Interest is often capitalised into the facility rather than paid monthly.

How the debt is repaid

From sale proceeds at completion, or a refinance into a term facility if you intend to hold.

What lenders assess

Gross realisation value, total development cost, your track record, the builder's capacity and the exit strategy.

Wollongong specific factors

Escarpment slope, geotechnical conditions, flood mapping and Wollongong City Council conditions of consent all feed into how a lender views the risk. For smaller projects, our dual occupancy loans page may be the better starting point.

Lenders work to two limits at once, a percentage of total development cost and a percentage of gross realisation value. The lower of the two determines your facility.

Total development cost

Includes land, construction, professional fees, council contributions, interest and contingency.

Gross realisation value

The total expected sale value of the completed project.

Who lends what

Major banks are the most conservative on both measures and require the strongest presales and borrower experience. Non bank and private lenders go considerably higher on gearing, with a higher interest rate and line fee as the trade off.

Your equity contribution

Usually required to go in first, before the lender starts funding draws. Land already owned outright can often count towards that equity at current market value rather than what you paid for it. If the equity is coming from another property, see how to access equity in Wollongong.

We model several funding structures side by side so you can see the true cost of capital for each.

Not always. Bank lenders typically require qualified presales, but non bank and private lenders will frequently fund with none at all, at a higher rate.

What banks require

A level of qualified presales measured as a proportion of the debt to be repaid, with unconditional exchanged contracts and deposits held. They also scrutinise buyer profile, limiting sales to related parties or foreign purchasers.

What non bank lenders offer

Funding on a speculative or residual stock basis with no presales, particularly for smaller projects such as townhouse or dual occupancy developments common across Wollongong suburbs like Corrimal, Woonona, Warrawong and Figtree. Pricing is higher to reflect the greater market risk.

The calculation to run

For smaller developers, the decision is whether the extra interest cost of a no presale facility is less than the margin given away discounting stock to secure early contracts. Knowing which Wollongong suburbs are growing fastest helps you judge how quickly stock will move. We run that calculation before you commit to a marketing strategy.

Lenders want a full feasibility, development approval, a fixed price building contract and a defined exit before they will approve a development site. A complete submission includes:

• A feasibility study showing total development cost, gross realisation value, profit and profit on cost

• Development approval, or a clear planning pathway and evidence of council support

• A fixed price building contract with a licensed builder, plus the builder's financial capacity and insurance

• Independent valuation on an as is and as if complete basis

• Quantity surveyor report on costings

• Your development track record and CV of completed projects

• A defined exit, whether sale or refinance to a hold facility

Wollongong site due diligence

Site investigations matter more here than in flatter markets. Geotechnical reports for escarpment blocks, bushfire assessments, acid sulfate soil considerations near the coastal plain and Port Kembla, easements and stormwater constraints all affect both cost and lender appetite.

If your exit is to hold rather than sell, plan the commercial term facility at the same time. Getting the investigations done before approaching a lender avoids conditional approvals that later unravel.