Construction industry faced crisis - Lateline Business

[andrew_de_a]

http://www.abc.net.au/lateline/business/

story basically says that any slowdown in demand from the credit crisis will be mirrored by a slowdown in construction as both parties will not be able to access finance.

the person interviewed says that due to these factors prices will not fall at rates seen in other countries.

 

[Ross]

Certainly can vouch for access to finance drying up.
I work in the Commercial property development industry and our biggest challenge now is financing projects as some of the banks have literally turned off the tap.

 

[craigb]

and with this comment i as a builder have not persued projects , knowing this was around the corner, although builder rates should be cheaper, and if you have finance ,it would be a good time to add onto your existing homes.

 

[JoannaK]

it certainly is interesting times right now.

the market has slowed, so purchasers are expecting prices of properties to fall, but construction costs have not fallen, and in most cases are still rising due to the cost of concrete and steel and labour.

banks these days are lending on only 50% and at the same time expecting 50% to 60% presales before they'll agree to fund.

 

[craigb]

better to be not building for me than to have a project only 80% compleate and then pulled from under you, out laying 1/2 mill to make 100k is still risky?

 

[VYBerlinaV8]

I called the bank yesterday to get an indication if they'd be happy to lend on a property I'm looking at, and they said no probs at all.

 

[tcocaro]

just an opinion but what I believe is gone was the borderline loans. The half doc, no doc, some doc, part doc, wrong doc, bad doc and whats up doc loans.

Therefore what was seen as a good application before is now the minimum standard and what was seen as a borderline app is now gone and not accepted.

Therefore those persons, developers, builders or borrower in general who has good credit i.e. no defaults and their loan proposal is sound and backed i.e. with QS, valuation or otherwise will still get a loan.

The game has changed so far in that credit isn't a walk in the park its something to fight for again and more specifically banks are now actually following up and qualifying information.

I hope banks havent simply cut LVR's to 50-60 and are still considering 70-80 (80 is pushing i know) maybe 75

PS for those freaking where talking commercial loans... for resi 90 is still the go.. good luck finding higher than that though..

 

[Aaron Sice]

better to be not building for me than to have a project only 80% compleate and then pulled from under you, out laying 1/2 mill to make 100k is still risky?

that's just "developer's profit" or 20%....?