Non-Banks Pivot to Fast-Track Construction

In a move that signals lenders’ changing appetite to risk, Asia-Pacific private equity firm PAG has broken ranks to accept up to 40 per cent of qualified pre-sales (QPS) via deposit payment platform Coposit.

Believed to be in response to challenging pre-sale conditions, the move could help get housing projects out of the ground sooner, according to Coposit chief executive Chris Ferris. 

“Typically developers need to achieve qualified pre-sales of between 50 and 60 per cent of the project before they can unlock construction funding to proceed with construction,” Ferris said.

 “It will go a long way to bringing new housing supply to the market.”

Developers including Clutch, Goldfields and Thirdi have partnered with Coposit to help secure off the plan sales in a challenging market. 

The tech platform helps to stem the deposit gap in off-the-plan purchases, facilitating a $10,000 upfront payment and the remainder of a purchaser’s deposit is paid over the course of the project’s construction.

“The commitment from PAG to accept Coposit sales as qualified pre-sales sends a clear message to developers, and the market, that our simple and secure deposit model for buying off the plan has earned the confidence of astute lenders,” he said. 

“We have no doubt this will help see more projects out of the ground and our purchasers into their new homes sooner.”

According to CBRE data for new residential-to-sell construction lending, the largest cohort of lenders require 80-100 per cent of debt funding covered by pre-sales.

Ferris said Coposit had onboarded more than 100 projects with an end value of about $9 billion. 

While non-bank lending makes up about 6 per cent of the Australian commercial real estate debt, private credit’s market share is growing. 

Research by non-bank lender Payton Capital last year revealed that the value of non-bank lending in the market was about $74 billion in 2024, with an opportunity to double in the next five years.

The PAG move follows news last year that Commonwealth Bank of Australia’s business bank had stepped up as the first major bank to allow off-the-plan purchases with Coposit.