Non-Bank Lenders Fill Australian Property Funding Gap
Non-bank lenders are expected to fill an estimated $35 billion property funding gap by 2023, due to stricter capital requirements.
Banks are increasingly turning down property-related loans due to the inability to meet higher capital requirements from low or non-income generating assets.
Australian regulators ordered the three largest banks in Australia to boost capital holdings by $34.5 billion in addition to a $69 billion buffer imposed in 2018. As of March, Australian banks had approximately $170 billion of commercial property exposure, according to regulators.
Australian and New Zealand commercial real estate debt specialist MaxCap notes that transactions traditionally undertaken by banks have already been replaced with non-bank lenders, with this gap expected to grow to A$50 billion ($35 billion) by 2023. MaxCap reportedly already has $1.4 billion of deals in the pipeline in the next nine to 12 months.
