The residential construction finance industry is pivotal in boosting Australia's economy and community.

Its role in expanding the construction sector to address the severe shortage of residential dwellings is crucial. Yet, as 2024 approaches, the industry faces a series of significant challenges.

According to Matthew Royal, Co-Founder and Director of national development finance advisory group, Development Finance Partners (DFP) – which has overseen more than $3bn in loans – the company continues to experience high enquiry levels from small to medium size developers seeking construction finance as banks pull back from the volatile sector and consumer sentiment for buying off-the-plan slows significantly.

As we head into 2024, the residential construction finance industry in Australia must navigate a landscape filled with challenges,” Royal said.

Top 5 challenges & Mitigation Strategies in 2024

Matthew identifies a range of factors that the construction finance industry will face in 2024 including; builder insolvencies, lending safety risks, rising cost of capital, consumer confidence, pre-sales hurdles, industry capacity constraints, changes in vacancy fees and foreign investment.

As a means to mitigate these challenges, Matthew articulates the importance of employing smarter and more innovative lending strategies to address common pitfalls. Furthermore, he discusses the integral role of professional services in tackling capacity constraints, along with early engagement to avoid delays. 



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