New insights from Stamford Capital’s 2025 Real Estate Debt Capital Markets Survey suggest NSW’s property market is entering a more positive phase. The annual survey captures the sentiment of 100 lenders across Australia, including major banks, non-banks, private credit funds, and institutional investors, offering a clear view of how capital providers are approaching the year ahead.
Credit conditions are stabilising, rate cuts are back on the table, and lender appetite is higher than ever, particularly for residential and industrial assets. While feasibility pressures and labour shortages remain a challenge, confidence is gradually returning across key commercial real estate sectors.
Easing credit conditions open the door to cautious optimism
After two years of tightening, the credit environment is starting to shift. Respondents to the 2025 Real Estate Debt Capital Markets Survey flagged improved sentiment across most asset classes, with residential development and industrial leading the way. The combination of stabilising inflation, rate cut expectations, and more lenient lending criteria is giving borrowers greater certainty and prompting strong activity.
At the same time, developers are still grappling with high construction costs, slow planning approvals, and labour shortages, challenges that are especially acute in fast-growing areas like Western Sydney. As a result, feasibility remains a critical factor, particularly in new and affordable housing supply.
Lender appetite is high – but discipline remains
Our survey findings show that most lenders believe we’ve reached the bottom of the current cycle. Around 80% expect credit conditions to improve or remain stable this year. Sentiment around construction finance has also lifted, with both bank and non-bank lenders reporting greater comfort in funding well-structured deals.
Looking at sector sentiment:
- 63% of lenders believe the commercial office sector is in recovery
- 55% say industrial is at its peak
- 38% see residential development entering recovery, with 20% already in early growth
- 66% see apartments and housing as being in early growth or recovery
Lenders remain selective, with a strong preference for experienced sponsors and sound feasibility metrics. ESG compliance, build quality, and asset positioning are also playing a larger role in credit decisions – particularly in the office and retail space.
Residential demand builds, office stabilises, and industrial stays resilient
NSW’s residential market is gaining momentum, with further rate cut expectations, and strong interest from downsizers and owner-occupiers. Rezoning reforms are creating new medium-density opportunities, while constrained supply supports demand in outer metro areas.
Looking at sector sentiment:
- 63% of lenders believe the commercial office sector is in recovery
- 55% say industrial is at its peak
- 38% see residential development entering recovery, with 20% already in early growth
- 66% see apartments and housing stock as being in early growth or recovery
Office is stabilising, with a clear flight to quality focused on ESG-compliant, prime CBD assets. Investor confidence is returning, particularly at the premium end.
Retail is mixed: neighbourhood centres are performing well, but discretionary and large-format assets face headwinds. The rate-cutting cycle will help with increasing discretionary spending for more households.
Industrial continues to lead, driven by strong demand, low vacancy, and tight supply, especially in Western Sydney.
Case study: Industrial development lifecycle funding
Stamford recently delivered a full lifecycle funding solution to support a developer through the acquisition and construction of a new industrial asset in Western Sydney.
With a tight settlement deadline, Stamford secured urgent land bank finance to enable the purchase of a strategic site in Marsden Park. We then structured a $12M construction facility to fund delivery of a 3,500sqm warehouse, including mezzanine, offices, and 46 carparks — providing seamless support from site acquisition through to project completion.
Key Deal Terms
Asset class: Industrial
Owner type: Developer
Land Bank Facility:
60% LVR
6 month term
8.99% (non-bank lender)
Construction Facility:
65% of GRV
12 month term
10.04% (same non-bank lender)
By managing both funding phases, Stamford reduced execution risk, preserved project momentum, and enabled the client to move quickly in a high-demand industrial market.
Play to win with an experienced capital partner on your team
While property markets are not without their challenges, the tone has shifted. Lenders are keen to do more, demand is building in key sectors, and developers who’ve weathered the last two years are now better placed to move on emerging opportunities. That said, risk remains front of mind — particularly in construction. The more lenders in market, the more discretion borrowers need to have when picking a capital partner. Having the right capital structure, realistic feasibility, and an experienced team remains critical.
Contact Stamford Capital here to discuss your financing needs.
