The outlook for NSW real estate continues to strengthen as capital flows surge and market conditions align in favour of renewed development activity.
Capital Seeking Opportunities
Across the board, we’re seeing an extraordinary depth of capital available. Both the banks and private credit providers remain highly active, and we are being approached almost daily by either new entrants or established lenders looking to re-engage and deploy funds.
Leverage on the Rise, Pricing Improving
Leverage has shifted meaningfully. Where 75% loan-to-value ratios (LVRs) once represented the ceiling, we are now seeing leverage push towards 80% for the right sponsors and projects. At the same time, interest rates and margins are trending down, with lenders sharpening their pencils to win quality deals.
Construction Activity Returning
Our data shows construction starts beginning to lift from historical lows. After FY25, where a record proportion of our activity was refinancing land facilities, it’s encouraging to see clients move projects into construction. We expect this to be reflected soon in the ABS’s formally reported Building Activity numbers. This renewed momentum has been a key driver of our record quarter of $1bn+ (to date) in settlements, with our pipeline now exceeding $7bn.
Conditions Aligning for Developers
Confidence is returning to the market. With interest rates easing, construction costs stabilised, and residential supply still constrained, feasibilities are beginning to stack up again. Dormant sites are being reactivated, and developers are taking advantage of favourable funding conditions to move projects forward.
Case Study: End-to-End Funding – Childcare Centre
Stamford Capital recently delivered a complete funding solution for a developer from site acquisition through to completion for a new 78-place childcare centre in Penrith, Western Sydney.
The client engaged Stamford prior to land settlement, enabling us to secure a tailored land bank facility on a tight deadline. Following DA and builder engagement, this was seamlessly upsized to a construction facility with interest capitalised throughout the build. Upon practical completion and securing a long-term lease with a national operator, Stamford arranged a competitive investment facility, providing the client with maximum yield and flexibility.
Key Deal Terms
Asset class: Childcare (specialist new-build)
Owner type: Private developer/operator
Land Bank Facility:
- 65% LVR (based on independent valuation, non-bank)
- 9-month term (to allow for DA and build tender)
- 8.75% p.a. (interest only, capitalised)
Construction Facility:
- 75% of Total Development Cost (TDC), including holding and soft costs
- 15-month term
- 9.85% p.a. (interest fully capitalised)
- Drawdowns on QS-certified milestones
Investment Facility (Post-PC):
- 65% of GRV (bank lender, investment loan)
- 2-year term, amortising
- 6.20% p.a., serviced from new 15-year lease to national operator
By managing the entire capital stack, from initial land acquisition funding, through construction, and into a long-term investment loan, Stamford reduced execution risk at each stage. The structure delivered capital efficiency (client only contributed 30% of overall costs), safeguarded momentum during approvals, and ensured a smooth transition from expensive construction debt to efficient investment finance, maximising the client’s return on equity.
Takeaway
Capital is abundant, leverage is stretching higher, and deal momentum is accelerating. With construction activity beginning to lift, the environment is primed for developers and investors to secure funding on increasingly attractive terms and bring long-planned projects to life.
Having the right capital structure, realistic feasibility, and an experienced team remains critical.
Contact David Youssef at Stamford Capital for a confidential discussion.