The Australian property development industry has weathered significant challenges over the past few years, from the disruptions of COVID-19 to soft market conditions and the relentless rise in construction costs. However, as we move into the 2025/2026 financial year, there is growing optimism in the sector, driven by an evolving lending landscape and increasing access to construction funding through reputable fund managers.
Major Banks and Their Lending Outlook
Australia’s major banks are making a noticeable comeback in the construction lending space. After a period of tight restrictions and heightened risk aversion, there’s a clear softening in their lending criteria, making funding more accessible for a broader range of projects.
The banks are back, and they’re open for business.
Key shifts in construction lending include
- Reduced Pre-Sales Requirements – In many cases, banks are waiving pre-sales entirely for smaller projects (sub-$5 million). For larger developments, only 50% debt cover is now being requested, which is well below previous thresholds.
- More Competitive Terms – Banks are offering more flexible terms to support developers in high-demand locations, especially in Sydney, Melbourne, and Brisbane’s growth corridors.
- Support for Smaller, Well-Structured Projects – With less red tape for experienced developers, banks are prioritising deals that demonstrate feasibility, market demand, and solid construction partners.
While banks still want to see quality, their appetite for construction deals is clearly growing. For developers who were previously reliant on alternative funding, mainstream finance is once again a viable, and often preferable, option.
The Rise of Private Lending and Reputable Fund Managers.
Even with banks back in the picture, private lenders and reputable fund managers continue to play a vital role in the funding landscape, particularly for projects that fall outside traditional lending criteria.
The private lending market has grown rapidly, with a surge of new lenders entering the space over the past few years. This increased competition has led to more flexible, innovative funding solutions tailored to developers’ needs.
Here’s why private funding remains a strong option
Tailored, Flexible Terms – Private lenders shape deals around your project, not the other way around. No cookie-cutter funding models, just smart, adaptive finance.
Fast Turnarounds – Speed matters. Private funders can often assess, approve, and fund projects in a fraction of the time it takes the banks.
Higher LVRs – While banks often cap lending at 65% LVR, private lenders can go beyond, sometimes up to 80%, making it easier to get moving with less upfront capital.
BEDROCK Funding is actively supporting residential, commercial, and industrial developments in high-growth regions.
A Positive Outlook for the Industry
Despite past challenges, FY 2025/2026 presents a more stable and opportunity-rich environment for property developers. With major banks re-entering the construction lending space and private capital continuing to flow, funding is no longer the barrier it once was.
The takeaway? Strong, well-structured projects are getting funded. Whether you’re a seasoned developer or building your next mid-sized project, the door to finance is open—and the time to act is now.