ANZ wary on developer financing in high supply capital city locations

Property developers in areas with strong apartment supply had faced more difficulty in obtaining finance, the ANZ’s head of Australia, Mark Whelan has confirmed.

The lender had dialled down its appetite to ­finance property developers, he told The Australian.

"Six months ago, eight months ago some of the development ­finance deals we were seeing were probably too aggressive for us so we stepped away from it (over) the terms and conditions and pricing.

"Even as I look outside my office in Brisbane, there are a lot of cranes that I can count and they vary from stuff that’s been sold off the plan, pretty much to foreign buyers, to top-end stuff and my experience tells me we need to be judicious.”

His comments come after Stockland chief Mark Steinert noted last week that “a lot of the supply that potentially could cause a problem is not going to be built this cycle because developers won’t get the funding”.

“(It’s) correct," Mark Whelan said.

"I can tell you now when one of the majors stopped doing some lending in the commercial space in NSW recently, some of those deals came back to market — we’d said no to them six months prior,” he said.

There were reports in August that Commonwealth Bank had tightened developer lending standards.

“If you sit down here in the (Melbourne) Docklands … and it gets to eight o’clock at night, there’s not many lights on in some of these apartment buildings so it’s a bit concerning. But we’ve been very cautious with some of those ­commercial developments for a long time.”