Property Development Finance in

Australia:A Complete Guide for Investors

Property development is one of the most profitable wealth building strategies in Australia. But securing the right funding is also the most challenging part of the journey. Whether you are planning a duplex, a townhouse project or a multimillion dollar apartment development. Understanding property development finance is important for success.

If you are navigating your options, this detailed guide will help you understand how development finance works, eligibility requirements, stages of funding, interest rates & how Rovo Finance can support your next project with smart & flexible solutions.

What Is Property Development Finance?

Property development finance is a specialised funding solution designed for developers who need capital to purchase land, complete construction, or manage the full lifecycle of a development project. Unlike standard home loans, development finance focuses on the project’s feasibility and end value, not just your personal borrowing capacity.

Lenders assess things such as:

• The Gross Realisation Value (GRV)
  

• Your experience as a developer
  

• Construction costs
  

• Pre-sales
  

• Project timeline
  

• Builder credentials and financial stability
  

For new and experienced developers alike, accessing development finance ensures you have the capital required to move confidently through each stage of your project.

Types of Property Development Finance in Australia

Different projects require different financial structures. The most common development funding types in Australia include:

1. Land Acquisition Loans

Used for purchasing vacant land or redevelopment sites.
Funding is typically provided at 50–70% of the land value, depending on the lender and zoning restrictions.

2. Construction Loans

Construction loans are released in stages based on progress:

1. Slab/base
   

2. Frame
   

3. Lock-up
   

4. Fixing
   

5. Completion
   

The lender pays your builder after each approved stage, ensuring costs are managed effectively.

3. Residential & Commercial Development Loans

These loans vary based on project type:

• Townhouses
  

• Duplexes
  

• Multi-unit residential buildings
  

• Small commercial or mixed use buildings
  

Loan-to-cost ratios (LTC) can go up to 70–80% for strong applications.

4. Mezzanine Finance

It is used when a developer needs additional funding on traditional borrowing limits.
Mezzanine finance fills the gap between senior debt (main loan) & equity.

5. Joint Venture (JV) Development Finance

A lender or investor contributes capital in exchange for a share in the completed project’s profits. Best  for developers wanting to minimise upfront financial contribution.

6. Bridging Finance for Developers

Useful when transitioning between acquiring land and starting construction.

How Much Can You Borrow for Property Development?

Borrowing limits depend on project size and risk. Common lending ratios include:

• Loan-to-Cost Ratio (LTC): Up to 80%
  

• Loan-to-Value Ratio (LVR): 65–75% on completion
  

• Gross Realisation Value (GRV) lending: Up to 65–70% of the end project value
  

Major banks are strict, while private lenders and specialised finance companies offer higher LVRs and faster approvals.

Key Factors Lenders Evaluate

To secure property development finance in Australia, lenders assess:

1. Developer Experience

Experienced developers get better terms.
However, first-time developers can still qualify with the right feasibility study and quality builder.

2. Pre-Sales

Pre-sales reduce the lender’s risk and prove market demand.

3. Project Feasibility & Profitability

A detailed feasibility report must outline:

• Purchase price
  

• Construction cost
  

• Council fees
  

• Marketing
  

• Contingencies
  

• Expected profit margin
  
  

4. Builder Strength

Reputation, financial health, and licensing all matter.
A strong builder can significantly improve approval chances.

Property Development Finance Interest Rates in 2025

Interest rates vary widely depending on the lender:

• Banks: 6–9%
  

• Specialist lenders: 8–14%
  

• Mezzanine lenders: 15–25%
  
  

While specialist lenders may have higher rates, they offer:

• Faster approvals
  

• Flexible lending criteria
  

• Support for complex projects
  

This is why many developers prefer non-bank lenders like Rovo Finance.

Stages of Borrowing in Property Development Finance

Development finance typically goes through three phases:

1. Land Acquisition

Borrowers secure funds for the initial site purchase.

2. Construction Funding

Funds are released progressively based on milestones.

3. Completion & Refinancing

Once construction is complete, developers can:

• Sell the finished project
  

• Refinance into a long-term investment loan
  

• Retain units for rental income
  
  

Common Mistakes Developers Make (And How to Avoid Them)

1. Underestimating Total Costs

Developers often overlook:

• Site works
  

• Infrastructure fees
  

• Architect & engineering charges
  

• Delays
  

• Material cost increases
  
  

2. Choosing the Wrong Builder

Always check:

• Licence
  

• Experience
  

• Financial stability
  

• Past disputes
  
  

3. Insufficient Pre-Sales

For larger projects, pre-sales are critical.

4. Incomplete Feasibility Study

A strong feasibility report boosts approval chances.

How Rovo Finance Supports Australian Developers

At Rovo Finance, we are not just another finance company. We are your partner in progress.

Our mission is to make borrowing simpler, smarter & more accessible. We combine financial expertise with advanced digital tools to help developers transform great ideas into successful projects.

Why Choose Rovo Finance?

✔ Fast approvals
✔ Access to major bank and non-bank lenders
✔ Flexible funding options for small and large developments
✔ Competitive interest rates
✔ Support for new and experienced developers
✔ Customized finance structuring for complex projects

Whether you are building two townhouses or a medium density apartment block. Our team provides personalised guidance throughout the process.

Final Thoughts

Property development finance can be the game changer that turns your dream into reality. Understanding how lenders think, how funding works & which structure best suits your project will enable you to make smarter decisions.

If you are ready to start your property development journey or want to make better your finance strategy then Rovo Finance is here to help you every step of the way.