Banks such as ING and Suncorp and second-tier lenders Investec and GE, are pushing back into commercial property lending on the Gold Coast.
Despite a poor period of unravelling impaired loans on the glitter strip during the financial crisis, the smaller financiers are developing an appetite as the market recovers. Smaller banks, known as “standardised” do not have to set aside as much capital against commercial property loans as the big four banks do, which gives them a slight advantage in deals with developers.
Suncorp, which sold off several impaired loans on the Gold Coast, including its stake in The Oracle high-rise residential towers to Goldman Sachs in 2012, has been chasing business while ING, which also sold out some bad property loans on the Gold Coast is backing property developer Pedro Pikos’ Kirra beach residential development and has been looking to do more business on the coast.
KPMG’s head of banking for the Asia Pacific Andrew Dickinson said he was not surprised to see the second-tiered banks and financiers make their way back to the regional cities for property lending as they sought to compete with the major banks.
ANZ’s head of commercial property, Eddie Law, whose property lending business has increased by 16 per cent in Queensland over the last year, also expected the smaller banks and financiers to dive back into the market.
“Some of the regional banks, given global liquidity is keen on increasing its exposure to real estate, will always be drawn in to that activity.”
Local agents noticed the activity, but say standards have not waned.
“Whilst the banks are active they are much more stringent in what can be built,” Colliers International Gold Coast director Tony Holland said.