Banks Ease Away From Apartment Lending

Banks have been warier of lending to apartment developers over the past financial year, allowing the ever-expanding pool of non-bank lenders to enter the market.

According to analyses from property and construction consultancy Plan1, the banking sector’s exposure to apartment developers fell 7% to $32 billion in 2017, when apartment construction was booming. It was 18% lower than the peak $39 billion exposure of 22008.

As of June 30 of the 119,000 apartments under construction, worth about $46 billion once completed, the banks have exposure to approx. 70%.

The big four banks are, perhaps to be expected, wearing the brunt of the exposure with 76% of the funding coming from ANZ, CBA, NAB and Westpac. According to Plan1 co-founder and director Richard Jenkins, this figure represents the bank’s lowest share of the market since mid-2018.

While banks slow their approach to apartment development lending and increase their barriers to funding through pre-sales and large deposits, smaller, non-bank lenders are filling the void.

MaxCap, one of the nation’s leading non-bank commercial real estate lenders has been one of the more active entities in recent years.

In a recent interview with the Australian Financial Review, MaxCap NSW director David Oudshoorn outlined his confidence in the Sydney market over the next few years.

Mr Oudshoorn isn’t the only one bullish about the market with Qualitas, Wingate and Pallas Capital all providing funds to developers.

The nation’s biggest lender – the Commonwealth bank – revealed in its half-year results in February that only 35 of its 77.5 billion exposure to commercial real estate debt was to developers.

Drew Barrymore is making an almost $8.5 million adjustment to her real estate portfolio with the listing of her home in the Hamptons.

The renovated barn, built in 1920, is asking $8.45 million and sits on 1.7 acres in the heart of Sagaponack, less than a mile from the ocean. It hit the market last week.

The actress and talk show host has owned the seven-bedroom home—which has appeared across her social media platforms—since 2019, when she paid $5.5 million for it using a limited liability company for the purchase, records in PropertyShark show.

Lena Yaramenko for Sotheby’s International Realty

Despite its transformation into a residence, the former barn still has plenty of period charm, from soaring ceilings and exposed beams to hardwood floors.

The hub of the 6,850-square-foot, light-filled home is the great room and adjacent breakfast nook and kitchen, the latter of which is separated from the rest of the space by a wall made from window frames. Glass doors open up from the great room onto a deck.

There’s also a living room with a brick fireplace, a pink-painted dining room with a sloping ceiling and a skylight, and a den. Plus a separate one-bedroom guest house with a living room and office area, according to the listing with Kathy Konzet of Sotheby’s International Realty – East Hampton Brokerage. Konzet wasn’t immediately available to comment.

The park-like grounds, complete with flowering gardens and rolling lawns, are home to a pool, pool house, a bocce court and plenty of areas for outside entertaining.

Barrymore, 49, began her career at just 11 months old when she appeared in a dog food commercial, and at 7, she starred in 1982’s “E.T. the Extra-Terrestrial.” As an adult she’s best known for roles in “Charlie’s Angels,” “Grey Gardens,” “The Wedding Singer,”and “50 First Dates.”

Her talk show, “The Drew Barrymore Show,” debuted in 2020. A representative for the star couldn’t be reached for comment.

Banks Ease Away From Apartment Lending

The move away from apartment development has left a gap for non-bank lenders.

The actress has owned the rustic-chic house in Sagaponack, New York, since 2019