Property Development Loans: How to Fund Your Next Project in Australia
Whether you’re subdividing a block, building a duplex, or tackling your first multi-unit development, one thing is certain—having the right finance in place can make or break your project. Property development loans are not like traditional mortgages. They’re tailored to the unique cash flow needs, risk factors, and timelines of development projects, and they often involve a more complex approval process.
At XploreFS, we specialise in helping developers—first-timers and seasoned pros alike—navigate the funding landscape with clarity, confidence, and structure. Here’s everything you need to know before you apply.
What Is a Property Development Loan?
A property development loan is a type of finance designed to fund the purchase of land and the construction of residential or commercial buildings. Unlike standard home loans, which are typically paid out in full upfront, development finance is usually structured in progressive drawdowns that align with key stages of your build. This might include land settlement, slab pour, frame stage, lock-up, and final completion.
These loans are generally short-term, interest-only, and based not just on your personal financial position – but also on the projected value of the finished development, the feasibility of the plan, and your team’s experience. Lenders will scrutinise your project costings, builder contracts, development approvals, and expected returns before committing.
Who Are These Loans Designed For?
You don’t need to be a major developer to qualify. Development finance is available for a wide range of projects, from smaller two-townhouse builds through to larger apartment blocks or land subdivisions. Many of our clients are investors looking to make better use of land they already own, or first-time developers taking on their inaugural project with a builder by their side.
What matters most is that you can show the lender your plans are viable. That includes a clearly laid out timeline, accurate construction costs, confirmed builder engagement, and a realistic strategy for paying off the loan—usually through the sale of the developed properties or refinancing once completed.
How Are Development Loans Structured?
Development finance isn’t handed over in one go. Instead, the loan is drawn down in stages that match the construction milestones. This means you’ll only be paying interest on the portion you’ve used – not the entire loan amount upfront. That’s ideal for managing cash flow, particularly on larger projects where funds are needed in phases.
Lenders will typically require you to contribute a percentage of the project cost – often 20 to 30 percent- as equity. You’ll also need to provide copies of council-approved plans, your builder contract, and a full feasibility study. For higher-risk or larger projects, lenders may require a certain number of pre-sales before releasing funds, to reduce their exposure and ensure there’s demand for what you’re building.
What Types of Projects Can Be Funded?
There’s no single blueprint for development finance. The right structure depends entirely on the nature and size of your project. We’ve helped clients secure funding for everything from duplexes and granny flats to full-scale townhouse estates and commercial builds. Some lenders specialise in small-scale infill developments, while others are geared toward larger land subdivisions and unit blocks.
In some cases, developers with limited equity might benefit from mezzanine finance or joint venture structures. These are more complex and come with higher risk, but they can be the difference between starting now or shelving the project indefinitely.
Why Use a Broker for Property Development Loans?
Development loans can be daunting. The paperwork is more extensive, the risk is higher, and the lender scrutiny is intense. But with the right broker, the process becomes far more manageable. At XploreFS, we don’t just send off applications – we work with you to present the strongest possible case, pairing your project with lenders who have a proven appetite for your type of build.
We understand the timelines, the cash flow demands, and the pitfalls that can delay or derail a project. That means we can guide you from the very beginning – helping you structure the deal in a way that’s realistic, efficient, and aligned with your goals. We’re also here for post-completion strategies like refinancing or rolling into your next development.
Is Now the Right Time to Build?
Market conditions are constantly shifting. Interest rates, construction costs, and buyer demand all play a role in determining whether now is the right time to launch your project. In places like Brisbane and South East Queensland, undersupply remains a key driver – particularly for new housing stock. Well-located developments with a solid plan behind them are still getting strong support from lenders and buyers alike.
With the right financial partner, development can be one of the most powerful wealth-building tools available. It’s not about rushing in – it’s about building smart, backing your numbers, and structuring finance that gives you the room to execute.
Start Your Development Journey with Confidence
No matter what stage you’re at – whether you’ve got DA approval in hand or you’re just tossing around block plans – we’d love to help you take the next step. A quick strategy session with our team can uncover finance options you may not have considered and help you avoid common pitfalls that cost time and money.
If you’re serious about growing your portfolio through development, let’s make sure your finance is built to match.
With the right financial partner, development can be one of the most powerful wealth-building tools available. It’s not about rushing in – it’s about building smart, backing your numbers, and structuring finance that gives you the room to execute.
Frequently Asked Questions About Property Developer Loans
What’s the Difference Between a Property Development Loan and a Construction Loan?
A construction loan typically funds the building of a single home or structure, while a property development loan is tailored for larger-scale or multi-unit projects. Development loans may cover land acquisition, planning approvals, infrastructure, and construction phases, making them ideal for investors building townhouses, duplexes, or entire unit blocks.
Can I Use a Property Development Loan for a Small-Scale Project in Brisbane?
Absolutely. Many lenders in Brisbane are open to funding small-scale residential developments, such as subdividing a block or building a few townhomes. While large projects often require extensive feasibility studies, smaller developments can still qualify with the right strategy, financials, and a clear exit plan.
How Much Deposit Do I Need for a Property Development Loan?
Deposit requirements vary based on the lender and size of the project, but most property development loans require a minimum of 20% to 30% of the total development cost. Some private lenders may allow more flexible terms if you can demonstrate strong experience or provide other security.
Do I Need a Pre-Sale Agreement to Get Development Finance?
For larger developments, especially those involving unit blocks or multiple dwellings, lenders may require a portion of the units to be pre-sold before approving finance. This reduces their risk and shows that there’s demand for the project. Smaller projects may not need pre-sales but will still require solid financial backing and feasibility planning.