Private lending › Land banking
Land loans and
land banking finance.
Funding to acquire and hold raw, englobo or vacant land ahead of rezoning, approval or development, with interest capitalised where the site produces no income.
Get indicative terms
Same day, in writing. No credit check to enquire.
The basics
What land banking means
Land banking is acquiring land and holding it, usually because its value depends on something that has not happened yet: a rezoning, a development approval, an infrastructure commitment, or simply the urban boundary moving closer.
It is worth separating two things that share the name. Land banking as a development strategy means a developer or investor buying a site to hold and later build on or sell. Land banking schemes, where investors buy fractional interests in unapproved rural land on promises of future rezoning, are a different thing entirely and have been the subject of repeated ASIC action in Australia. We finance the first. We do not fund the second.
From a lending perspective, land is harder than housing. It produces no income, it can take years to realise, and if a rezoning does not come through the value may not move at all. Banks are consequently restrictive. Non-bank lenders will look at it, at lower leverage and with a clear view of how the loan gets repaid.
What we fund
Land finance we arrange
- Vacant residential landIndividual titled lots, whether you are holding, building later, or bridging to a construction facility.
- Englobo and broadacre sitesLarger undeveloped parcels held ahead of subdivision or rezoning. Assessed on as-is value, not hoped-for value.
- Subdivision financeFunding the civil works, headworks and infrastructure contributions that turn one title into many.
- Land banking holdsMedium-term facilities against sites being held through a planning process, with interest capitalised where there is no income to service it.
Typical structure
From a lending perspective, land is harder than housing. It produces no income, it can take years to realise, and if a rezoning does not come through the value may not move at all. Banks are consequently restrictive. Non-bank lenders will look at it, at lower leverage and with a clear view of how the loan gets repaid.
Credit appetite
What lenders look at
As-is value, not future value
Almost every land lender advances against what the site is worth today. A rezoning that has not happened is upside for you, not security for them.
The exit
A sale, a development approval that enables a construction facility, or a refinance. Holding land indefinitely with no repayment event is the hardest version of this to fund.
Zoning and planning status
Current zoning, any lodged applications, and how advanced the planning pathway is. Evidence here moves both leverage and pricing.
Servicing
Land produces no rent. Either you service the facility from other income, or interest is capitalised and cleared at the exit.
A note on leverage
Expect lower LVRs on land than on built housing. That is not a lender being difficult, it reflects that vacant land is slower to sell and more volatile in a downturn. Plan your equity contribution accordingly rather than being surprised by it.
Terms
Land finance parameters
Land pricing depends heavily on location, zoning, size and whether there is a planning pathway underway. A titled metropolitan lot and a broadacre parcel three hours from a capital are very different propositions.
| Rates | From 7.99% p.a. |
|---|---|
| Establishment fee | From 0.75% |
| Term | 3 – 60 months |
| Maximum LVR | Up to 80% |
| Loan size | From $200,000 |
| Locations | All of Australia |
| Indicative terms | Same day |
FAQ
Frequently asked questions
What is land banking?
Land banking is buying land and holding it rather than developing immediately, on the basis that its value will rise through rezoning, development approval, infrastructure or urban expansion. As a development strategy it is ordinary practice. It is distinct from land banking investment schemes selling fractional interests in unapproved rural land, which have been the subject of repeated ASIC warnings.
What is a land bank?
In a development context, a land bank is the portfolio of undeveloped sites a developer holds for future projects. It gives them a pipeline without having to buy at whatever the market asks when they are ready to build.
Do banks lend money to buy land?
Some do, at conservative leverage and usually only for titled residential lots with a clear intention to build. Vacant, englobo and broadacre land is where banks are most restrictive, and where non-bank and private lenders do most of this work.
How much can I borrow against land?
Up to 80% of as-is value across our panel, though land typically sits below the maximum available on built housing. Titled metropolitan lots achieve the highest leverage; broadacre and regional sites the lowest.
Can I borrow against land I already own?
Yes. Land you own outright or with modest debt against it is usable security, whether the purpose is to fund a development, release equity for another project, or acquire an adjoining parcel.
How do I repay a land loan if the site earns nothing?
Either you service it from other income, or interest is capitalised onto the facility and cleared when the site sells, gets approval and rolls into a construction facility, or is refinanced. The exit is the part lenders scrutinise most on land deals.
What is englobo land?
Englobo land is a large undeveloped parcel held under a single title with subdivision potential. It is priced and financed as a bulk landholding rather than as individual lots, and valuations reflect the cost and time to bring it to market.
Enquire
Tell us about the site.
Location, zoning, planning status and how the facility gets repaid. Indicative terms the same day.
Prefer to talk it through? Call 0478 715 429.