MaxCap expect appetite for apartment projects to get through APRA tightening

Bill McWilliams, MaxCap’s CIO, expects APRA will continue to monitor LVR’s and Debt to Income Ratio’s for new lending closely in 2022
MaxCap expect appetite for apartment projects to get through APRA tightening
Jonathan ChancellorAugust 5, 2021

Bill McWilliams, the chief investment officer at MaxCap Group, reckons the recent macroprudential intervention from APRA was unlikely to have a material impact on house prices or credit growth.

"We do not expect there to be any constraint in buyer demand for either apartments or house and land packages as a result of the intervention, with appetite to continue to be driven by supply and demand fundamentals," McWilliams said. 

MaxCap is a leading real estate finance and investment manager.

"We do however expect APRA will continue to monitor LVR’s and Debt to Income Ratio’s for new lending closely, and depending on trends, this could lead to a series of progressive interventions, as happened in 2014 and 2017."

The recent macroprudential intervention from APRA requires lenders to include an additional 0.5% servicing buffer.

McWilliams said this was "was consistent with our expectations given the recent growth in housing credit at moderately higher debt to income ratios.

"We consider this to be a subtle change only which has been implemented to improve the resilience of borrowers in periods of economic shock by creating a larger servicing buffer. 

"Our view is that such a slight change to affordability is unlikely to have a material impact to house prices or credit growth, as less than 10% of home loan applications borrow at capacity.

"APRA itself said “the overall impact on aggregate housing credit growth flowing from this is expected to be fairly modest”.

Founded in 2007, MaxCap have originated and managed more than $12.3bn of Australian CRE debt across more than 450 loans, with current funds under management and advice of $4.1bn.

Earlier this month McWilliams joined the team at Landream and V-Leader to break ground on the project The International in Brighton, which is being funded by MaxCap.

MaxCap has provided a first mortgage construction facility to S&S Projects for their 11-storey luxury boutique apartment project, Awaken on the Gold Coast.

MaxCap has funded Salvo’s mixed-use residential project in Melbourne’s Southbank, with the non-bank lender providing a $75 million first-mortgage for the development of Stature, a 35-level mixed-use tower with 175 apartments, commercial office space and ground floor retail space at 35-51 Hanco​ ck Street.

MaxCap Group recently delivered a first mortgage construction facility to Lu​ xcon for the development of its East Melbourne apartment complex.

A $76m debt facility covers land and construction funding for The Address.

Marketing commenced for in late February 2021 with the Sydney-based developer Lu​ xcon securing strong off the pl​ an sales in its first project in Melbourne.

The $125-million, 23 apartment development overlooks Fitzroy Gardens saw five local buyers seek out the apartments prior to their recent official launch.

The 10-storey park-side development at 372-380 Albert Street in East Melbourne features two-, three- and four-bedroom apartments.

The two-bedroom apartments are priced from $2.5 million to $3.15 million and three-bedroom apartments, from $4.5 million to $5.35 million.

The three-bedroom, plus study, sub penthouses are price at $8 million to $8.75 million.

The penthouse is priced at $25 million with its own lap pool.

All of the apartments will have outdoor areas in the Woods Bagot-designed complex.

The first five sales were secured by April with about 95 per cent of inquiry being downsizes from larger homes across Melbourne.

The apartment project will replace a nine-level office building acquired for $30 million in May last year from entrepreneur Nathan Cher, the co-founder of the Run Property Group.

“Industry research suggests that East Melbourne is short of apartment sites for developments," said MaxCap’s chief investment officer, Bill McWilliams. 

“There is significant demand in the East Melbourne area with purchasers looking for quality mid to high rise towers,” Mr McWilliams said. 

“Demand is reportedly strong in the $2m - $5m range and we have seen sales at the level of $30,000 per square metre and above in several recent transactions.

Luxcon's managing director Ilya Melnikoff recently acquired its second trophy apartment sites in inner Melbourne.

It purchased the Beacon Cove Food Store site in Port Melbourne for $16.65 million. The 1400 sqm site at 103 Beach Street, across the road from Station Pier, was acquired from Melbourne developer V-Leader, which paid $11.2 million for it in 2017.

The East Melbourne project is expected to be complete by December 2022.

Lexicon's completed Sydney projects include the Aristocrat of Rose Bay at 62A Dover Road, Rose Bay; Jardine at 35 Oxford Street, Epping, and 88 Kensington at 88 Anzac Parade, Kensington.

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

Editor's Picks

Exclusive: Gardner Vaughan smashes Bokarina price record with Bask penthouse sale
First look: MADE Property doubles down in Kirribilli new apartment market
Spyre Group brings successful Queensland blueprint to Melbourne with Hampton Ltd
Saxon Street by Milieu to bring new housing and urban design to Brunswick’s cultural core
Construction begins at Fishermans Bend Innovation Precinct

Related Projects

16-22 Maud Street, Newstead QLD 4006
16-22 Maud Street, Newstead QLD 4006
16-22 Maud Street, Newstead QLD 4006
Price
Contact agent
35-37 Mount Street, Prahran VIC 3181
35-37 Mount Street, Prahran VIC 3181
35-37 Mount Street, Prahran VIC 3181
Price
Contact agent
118-124 Benelong Road, Cremorne NSW 2090
118-124 Benelong Road, Cremorne NSW 2090
118-124 Benelong Road, Cremorne NSW 2090
Price
Contact agent
118-120 Matthew Flinders Drive, Cooee Bay QLD 4703
118-120 Matthew Flinders Drive, Cooee Bay QLD 4703
118-120 Matthew Flinders Drive, Cooee Bay QLD 4703
Price
Contact agent
26-62 Kinross Road, Thornlands QLD 4164
26-62 Kinross Road, Thornlands QLD 4164
26-62 Kinross Road, Thornlands QLD 4164
Price
Contact agent
9-11 Baroonba Street, Whitebridge NSW 2290
9-11 Baroonba Street, Whitebridge NSW 2290
9-11 Baroonba Street, Whitebridge NSW 2290
Price
Contact agent
18 Ransley Street, Penrith NSW 2750
Perle, East Side Quarter, Penrith - 18 Ransley Street, Penrith
18 Ransley Street, Penrith NSW 2750
Price
Contact agent
Ernest Cavanagh Street, Gungahlin ACT 2912
Raya, Gungahlin - Ernest Cavanagh Street, Gungahlin
Ernest Cavanagh Street, Gungahlin ACT 2912
Price
Contact agent
39 Browning Street, South Brisbane QLD 4101
39-41 Browning Street, South Brisbane - 39 Browning Street, South Brisbane
39 Browning Street, South Brisbane QLD 4101
Price
Contact agent
675 Gardeners Road, Mascot NSW 2020
Kiara North, Mascot - 675 Gardeners Road, Mascot
675 Gardeners Road, Mascot NSW 2020
Price
Contact agent
187 Salvado Road, Jolimont WA 6014
Jolie, Jolimont - 187 Salvado Road, Jolimont
187 Salvado Road, Jolimont WA 6014
Price
Contact agent
47 Maning Avenue, Sandy Bay TAS 7005
Grace Residences - 47 Maning Avenue, Sandy Bay
47 Maning Avenue, Sandy Bay TAS 7005
Price
Contact agent
Cove Lane, Narooma NSW 2546
Cove, Narooma - Cove Lane, Narooma
Cove Lane, Narooma NSW 2546
Price
Contact agent
52-56 Ramsay Street, Five Dock NSW 2046
Ava, Five Dock - 52-56 Ramsay Street, Five Dock
52-56 Ramsay Street, Five Dock NSW 2046
Price
Contact agent
2375 Gold Coast Highway, Mermaid Beach QLD 4218
The Alfred - 2375 Gold Coast Highway, Mermaid Beach
2375 Gold Coast Highway, Mermaid Beach QLD 4218
Price
Contact agent
129-131 Russell Ave, Dolls Point NSW 2219
ALLURE COLLECTION - 129-131 Russell Ave, Dolls Point
129-131 Russell Ave, Dolls Point NSW 2219
Price
Contact agent
62 Constitution Avenue, Parkes ACT 2600
The Eastbourne on Commonwealth Park - 62 Constitution Avenue, Parkes
62 Constitution Avenue, Parkes ACT 2600
Price
Contact agent
155 Old Burleigh Road, Broadbeach QLD 4218
Sandpiper, Broadbeach - 155 Old Burleigh Road, Broadbeach
155 Old Burleigh Road, Broadbeach QLD 4218
Price
Contact agent
33 Vulture Street, West End QLD 4101
33 Vulture Street, West End QLD 4101
33 Vulture Street, West End QLD 4101
Price
Contact agent
19 Governor Terrace, Murarrie QLD 4172
Park Hill Village Collection, Murarrie - 19 Governor Terrace, Murarrie
19 Governor Terrace, Murarrie QLD 4172
Price
Contact agent
122 Marine Parade, Miami QLD 4220
Nalu, Miami - 122 Marine Parade, Miami
122 Marine Parade, Miami QLD 4220
Price
Contact agent
34 Jacaranda Place, Indooroopilly QLD 4068
34 Jacaranda Place, Indooroopilly QLD 4068
34 Jacaranda Place, Indooroopilly QLD 4068
Price
Contact agent
167 Old Burleigh Road, Broadbeach QLD 4218
167 Old Burleigh Road, Broadbeach QLD 4218
167 Old Burleigh Road, Broadbeach QLD 4218
Price
Contact agent
21 Queens Way, Yeerongpilly QLD 4105
Yeerongpilly Green - 21 Queens Way, Yeerongpilly
21 Queens Way, Yeerongpilly QLD 4105
Price
Contact agent
445-449 River St, Ballina NSW 2478
Solhaven - 445-449 River St, Ballina
445-449 River St, Ballina NSW 2478
Price
Contact agent
52 Sunset Boulevard, Surfers Paradise QLD 4217
52 Sunset Boulevard, Surfers Paradise QLD 4217
52 Sunset Boulevard, Surfers Paradise QLD 4217
Price
Contact agent
6 Jack Brabham Drive, Hurstville NSW
Horizon Hurstville - 6 Jack Brabham Drive, Hurstville
6 Jack Brabham Drive, Hurstville NSW
Price
Contact agent
49 Seena Drive, Edgeworth NSW 2285
49 Seena Drive, Edgeworth NSW 2285
49 Seena Drive, Edgeworth NSW 2285
Price
Contact agent
Lot 118 Ocean Steamers Road, Port Adelaide SA 5015
Lot 118 Ocean Steamers Road, Port Adelaide SA 5015
Lot 118 Ocean Steamers Road, Port Adelaide SA 5015
Price
Contact agent
203 Ashmore Road, Benowa QLD 4217
203 Ashmore Road, Benowa QLD 4217
203 Ashmore Road, Benowa QLD 4217
Price
Contact agent
774 Ripley Road, Ripley QLD 4306
774 Ripley Road, Ripley QLD 4306
774 Ripley Road, Ripley QLD 4306
Price
Contact agent
6 Homelea Court, Rivervale WA 6103
6 Homelea Court, Rivervale WA 6103
6 Homelea Court, Rivervale WA 6103
Price
Contact agent
7002 Ripley Road, Ripley QLD 4306
7002 Ripley Road, Ripley QLD 4306
7002 Ripley Road, Ripley QLD 4306
Price
Contact agent
3 Delos Way, Sorrento WA 6020
3 Delos Way, Sorrento WA 6020
3 Delos Way, Sorrento WA 6020
Price
Contact agent
77 Sutton Street, Redcliffe QLD 4020
77 Sutton Street, Redcliffe QLD 4020
77 Sutton Street, Redcliffe QLD 4020
Price
Contact agent
119 Queen Street & 86 King Street, Bendigo VIC 3550
119 Queen Street & 86 King Street, Bendigo VIC 3550
119 Queen Street & 86 King Street, Bendigo VIC 3550
Price
Contact agent
181 Prospect Road, Prospect SA 5082
181 Prospect Road, Prospect SA 5082
181 Prospect Road, Prospect SA 5082
Price
Contact agent
593-595 Albany Highway, Victoria Park WA 6100
593-595 Albany Highway, Victoria Park WA 6100
593-595 Albany Highway, Victoria Park WA 6100
Price
Contact agent
1-28, 40 Civic Way, Rouse Hill NSW 2155
1-28, 40 Civic Way, Rouse Hill NSW 2155
1-28, 40 Civic Way, Rouse Hill NSW 2155
Price
Contact agent
93-97 Bay Street, Brighton VIC 3186
93-97 Bay Street, Brighton VIC 3186
93-97 Bay Street, Brighton VIC 3186
Price
Contact agent
22-38 & 27-31 The Avenue, Coburg VIC 3058
22-38 & 27-31 The Avenue, Coburg VIC 3058
22-38 & 27-31 The Avenue, Coburg VIC 3058
Price
Contact agent
1F Ashline Street, Wollert VIC 3750
1F Ashline Street, Wollert VIC 3750
1F Ashline Street, Wollert VIC 3750
Price
Contact agent
Lots 100 & 900 Kentucky Court, Cockburn Central WA 6164
Lots 100 & 900 Kentucky Court, Cockburn Central WA 6164
Lots 100 & 900 Kentucky Court, Cockburn Central WA 6164
Price
Contact agent
1260-1272 Malvern Road, Malvern VIC 3144
1260-1272 Malvern Road, Malvern VIC 3144
1260-1272 Malvern Road, Malvern VIC 3144
Price
Contact agent
472 Regency Road, Prospect SA 5082
472 Regency Road, Prospect SA 5082
472 Regency Road, Prospect SA 5082
Price
Contact agent
273A Gorge Road, Paradise SA 5075
273 Gorge Road, Paradise SA 5075 - 273A Gorge Road, Paradise
273A Gorge Road, Paradise SA 5075
Price
Contact agent
270 The Esplanade, Miami QLD 4220
270 The Esplanade, Miami QLD 4220
270 The Esplanade, Miami QLD 4220
Price
Contact agent
2 & 6 Austral Parade, East Bunbury WA 6230
2 & 6 Austral Parade, East Bunbury WA 6230
2 & 6 Austral Parade, East Bunbury WA 6230
Price
Contact agent
5 Charles Street, Charlestown NSW 2290
5 Charles Street, Charlestown NSW 2290
5 Charles Street, Charlestown NSW 2290
Price
Contact agent
59 & 69 Merthyr Road, New Farm QLD 4005
59 & 69 Merthyr Road, New Farm QLD 4005
59 & 69 Merthyr Road, New Farm QLD 4005
Price
Contact agent