VOXFIN’s Section-by-Section, Practical Guide for Covering Every Stage from Land Acquisition to Completed Stock
Property development finance in Australiaworks in stages – land acquisition, construction loan, and residual stock facility, each assessed on your project’s GRV (Gross Realisable Value) and TDC (Total Development Cost). Most banks have exited the sub-$10M development space, but specialist non-bank lenders and credit funds still fund well-structured projects from $500K upward. This guide covers the full financing roadmap, what lenders actually look for, and how VOXFIN gets development loans approved that others can’t place.
Most Developers Know What They Want to Build. Far Fewer Know How to Finance It.
I’ve placed development finance for dual occupancies, boutique apartment blocks, townhouse estates, and mixed-use projects across Australia. The ones that stall almost always stall at the same point: the developer has a great site, a workable feasibility, and a builder lined up, but no clear path to finance. The banks have said no, and they don’t know where to go next.
This guide maps the full financing roadmap for a residential development project—from the land purchase to the day the last unit settles. It’s written for developers, not bankers.
1. Understand the Development Finance Lifecycle
Not one, but three different loan facilities
Most people assume development finance is a single loan. It’s not. A properly structured residential development typically draws on three separate facilities, each with different lenders, terms, and security arrangements:
- Land acquisition loan: Finances the purchase of the development site before construction commences. Usually shorter term (12–24 months), secured against the land.
- Construction or development loan: The primary facility that funds the build. Drawn progressively as construction milestones are reached, not upfront as a lump sum.
- Residual stock loan: Short-term finance to hold completed but unsold dwellings while the project is being sold down. Prevents the developer from being forced into distressed sales.
Broker’s note: Many developers only think about the construction loan and ignore the land acquisition phase, often funding it from cash and putting unnecessary pressure on working capital. VOXFIN structures all three facilities from the start, so nothing is left exposed.Talk to a Specialist Finance Broker
2. Know the Three Numbers Every Lender Will Ask For
GRV, TDC, LTC: The metrics that determine what you can borrow
Before approaching any lender for development finance, you must know your project’s three core financial metrics. These are non-negotiable—get them wrong and no amount of relationship or presentation will move the dial.
| Metric | Stands For | Typical Lender Limit | What it Means |
|---|---|---|---|
| GRV | Gross Realisable Value | Loan ≤ 65% of GRV | Total value of all completed dwellings at market price |
| TDC | Total Development Cost | Loan ≤ 75–80% of TDC | All costs: land + construction + consultants + finance + contingency |
| LTC | Loan to Cost | See TDC above | The primary ratio non-bank lenders use to size senior debt |
Broker’s note: Your development finance application lives or dies on these numbers. A well-presented feasibility showing conservative GRV, clearly documented TDC, and an LTC under 75% gets reviewed seriously. An application without these gets put aside.
3. Senior Debt vs Mezzanine Finance – Know the Difference
Senior debt covers most of the cost. Mezzanine fills the equity gap.
Senior debt is the primary loan facility, typically up to 75–80% of TDC. It’s first in line for repayment and secured by a first mortgage over the development site. Most non-bank development lenders operate in this space.
Mezzanine finance sits between your senior debt and your equity contribution. It fills the gap when senior debt alone isn’t enough to cover total project costs, particularly for developers who want to preserve cash or run multiple projects simultaneously.
- Mezzanine finance typically sits at 80–90% of TDC—above the senior debt cap.
- Higher cost than senior debt (rates typically 12–20% p.a.) but unlocks projects that would otherwise stall.
- Secured by a second mortgage or caveat over the site.
- Most effective for developers with strong GRV margins who simply need to bridge the equity position.
4. The Presale Question and How to Navigate It
Some lenders require presales. Specialist lenders don’t always. Know which is which.
Traditional banks and some non-bank lenders require presales (executed contracts on a portion of the completed dwellings) before they will fund a construction loan. The standard benchmark is presales sufficient to cover the loan amount, which can mean 50–100% of the project contracted before a shovel is turned.
This is the single biggest barrier for small-scale developers. VOXFIN has direct relationships with specialist lenders who assess no-presale or low-presale applications on the strength of the site, the developer’s experience, and the quality of the feasibility. The key factors that support a no-presale application include:
- Strong GRV margin relative to TDC, ideally 30%+ profit on cost.
- Proven developer track record—even one or two prior completions significantly improve approval odds.
- Conservative end-value assumptions, using valuations below current market, not above.
- Experienced builder with a fixed-price contract already in place.
5. How to Structure a Development Finance Application
What lenders actually want to see before you pick up the phone
A development finance application is not a standard home loan application. Lenders in this space are assessing a business case, not just your personal income. A well-structured application includes:
- A current feasibility study with conservative GRV, full TDC breakdown, and sensitivity analysis.
- A detailed development program showing construction timeline and drawdown schedule.
- Evidence of DA approval (or lodgement status) and council zone confirmation.
- A fixed-price building contract or at minimum a detailed builder’s quote.
- Your development track record—prior completions, even if small scale.
- An independent valuation from a registered valuer confirming GRV—lenders will order their own, but having one upfront demonstrates rigour.
Broker’s note: Most development loan rejections I see are not because the project is not viable. They’re because the application was incomplete, the feasibility wasn’t presented clearly, or the borrower approached the wrong lender type. VOXFIN assesses your project before we approach any lender, so the first impression is the right one.
Why Is 2026 One of the Best Years to Be a Property Developer in Australia?
The 2026-27 Budget restricted negative gearing to new builds, redirecting both investor and first home buyer demand toward new residential construction.
The 2026-27 Federal Budget changed the demand equation for new residential development. Negative gearing is now restricted to new builds only from 1 July 2027, meaning investors who still want a tax-deductible property must buy new construction. Combined with the government’s $10 billion commitment to 100,000 new homes sold to first home buyers, demand for the product developers create has structurally increased.
Supply has not caught up. Most banks have exited the sub-$10M development space. Specialist non-bank lenders are active, but capacity is tightening as enquiry volumes increase. If you have a site, a DA, or a project at the feasibility stage—the time to have the finance conversation is now, not when you’re ready to break ground.
Development Finance Enquiry: From Feasibility to Construction Loan
VOXFIN places development loans from $500,000 to $50M+ across residential, commercial, and mixed-use projects. We assess your GRV, TDC, and LTC before approaching lenders, and we work with specialist non-bank lenders the major banks have no relationship with.
Start with a free feasibility conversation
Frequently Asked Questions About Property Development Finance Australia
What is the minimum project size for getting development finance in Australia?
Development finance in Australia is available from approximately $500,000 in total loan size, covering projects as small as a dual occupancy or a four-townhouse development. There is no universally enforced minimum. It depends on the lender. Larger non-bank credit funds typically prefer loans above $2–5 million, while smaller specialist lenders actively fund boutique residential projects below that threshold. VOXFIN works with lenders across the full size range and matches your project to the lender whose appetite and deal size most closely align with your development’s scale and structure.
Do I need a DA approved before applying for development finance?
A full development approval (DA) is not always required at the land acquisition stage but is almost always required before a construction or development loan will be issued. Some lenders will provide a land loan or pre-development facility while the DA is being processed, giving developers certainty of the site before approval is received. Once the DA is granted, the construction loan application can proceed with the approved plans and permit as supporting documentation. VOXFIN advises on the right timing to approach lenders at each stage—land, DA lodgement, and post-approval.
How much equity do I need to contribute to a development project?
Most development finance lenders require a developer equity contribution of 20–30% of Total Development Cost (TDC), meaning the loan covers 70–80% of all project costs. The exact equity requirement depends on your project’s GRV margin, the lender’s LTC policy, and your development track record. Mezzanine finance can reduce the cash equity requirement by filling the gap between senior debt (typically 70–75% of TDC) and your contributed equity, effectively allowing developers to retain more capital for other projects or contingencies. VOXFIN models the optimal capital stack for your project before approaching any lender.
Can I get development finance without presales in Australia?
Development finance without presales is available in Australia through specialist non-bank lenders and private credit funds that assess projects on the strength of the feasibility, GRV margin, developer experience, and construction contract rather than requiring executed sales contracts. The key criteria for a no-presale development loan typically include a profit-on-cost margin of 25–30% or higher, a proven track record of at least one prior completion, and a conservative GRV supported by an independent valuation. VOXFIN has direct lender relationships in the no-presale and low-presale development finance space that most brokers do not access.
What is the difference between a construction loan and a development loan?
A construction loan and a development loan are often used interchangeably but refer to different scales of projects. A construction loan typically funds a single dwelling or small dual occupancy for an owner-builder or residential borrower, drawn progressively through standard building stages. A development loan (or development finance facility) funds a multi-unit residential, commercial, or mixed-use project and is assessed on commercial metrics including GRV, TDC, LTC, presale coverage, and the developer’s experience and financial position. Development loans are placed with commercial lenders and non-bank credit funds rather than through standard residential mortgage channels, which is why a specialist broker like VOXFIN is essential.
Whether you’re at site identification, the DA stage, or ready to break ground—VOXFIN’s specialist development finance brokers assess your project and present it to the right lenders. No upfront cost. No obligation.
Speak to VOXFIN’s development finance team today!
Book a Feasibility Assessment | Call 03 7065 2000
