The table below provides developers with general information on the nature of property development funding across Australia. This information is provided by Development Finance Partners, a leading development funding advisor with offices across Australia, to assist the development industry with identifying the likely cost of project funding.
Glossary:
GRV: Gross Realisable Value – The value (net of GST) of the development stock upon completion of the project.
TDC: Total Development Cost - The sum of the hard and soft costs to complete a project excluding Development Application costs and the holding costs prior to Development Approval. The As Is Land Value not the Land Cost is included in the calculation of TDC.
LVR (GRV): Equals the total loan amount divided by the Gross Realisable Value.
LVR (TDC): Equals the total loan amount divided by the Total Development Costs.
Qualifying Pre-sales: As a general rule non-qualifying pre-sales are as follows:
Sales to non-resident purchasers;
Contracts secured by less than 10% deposit;
Contracts secured by deposit bonds;
Multiple sales to a single purchaser;
Purchasers who have purchased through a company where the personal guarantees of the Director/s are not provided;
Purchasers that are in anyway related to the guarantors of the loan;
Purchaser is also a related party to the Vendor of the Land.
Value of the Qualifying sales is generally also net of GST and sometime also net of Sales Commissions payable at settlement of lots.
BBSY: Bank Bill Swap Rate - A short-term interest rate used as a benchmark for the pricing of Australian dollar derivatives and securities, most notably floating rate bonds.
The information in this website and the links provided are for general information only and should not be taken as constituting professional advice from the website owner - The Urban Developer.com Pty Ltd (TUD). TUD is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how the website information relates to your unique circumstances. TUD is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this website.
