What Counts as a Qualifying Presale for Development Finance?
Development Finance
Qualifying presales · Presale cover · Off-the-plan contracts
A signed off-the-plan contract is not automatically a presale your lender will count. This guide sets out what makes a presale qualify, how to work out the cover your lender will actually see, what happens between approval and first drawdown, how to fix contracts a lender strikes, and how state law or a government presale program can change the answer.
Quick Answer
In property development finance, a qualifying presale is an off-the-plan sale contract that meets your development lender's definition and can therefore be counted toward its presale requirement. Lenders commonly require the contract to be binding and unconditional, at arm's length, supported by an acceptable deposit and to have a sunset date that extends beyond expected completion. The exact test varies by lender.
Also called: qualifying pre-sale, QPS, eligible presale contract. These terms are commonly used for a sale contract the lender will count. Presale cover is different: it is the ratio or amount of qualifying presales measured against the debt or other benchmark named in the term sheet.
What is a qualifying presale, and why is it not the same as a signed contract?
A qualifying presale is a signed off-the-plan contract that meets your lender's written definition, and only those contracts count toward the presale requirement on development finance for a residential project. A signed off-the-plan sale may appear on your sales schedule, but it is not automatically a qualifying presale for finance. Presale cover is something different: it is the lender's measure of qualifying contracts against the debt or other benchmark in the term sheet.
A presale usually counts as a qualifying presale when all of these are true:
- The contract is exchanged and binding, not an expression of interest or a holding deposit.
- Cooling-off has ended or been validly waived.
- No finance or other buyer condition is still outstanding.
- The buyer is at arm's length from the developer.
- The full deposit the lender requires is paid and held in trust.
- The sunset date leaves room for the build to run late.
- The price is at or near the figure the lender's valuer supports.
Lenders count contracts, not enquiries, expressions of interest or holding deposits. A buyer who has paid a holding deposit to reserve a lot has not signed anything that binds them, so it adds nothing to the presale test until an exchanged contract replaces it. That is one reason the presale test sits alongside how lenders test the sales side of a project, rather than replacing it.
Who writes the definition, the regulator or your lender?
Your lender writes the qualifying presale definition, not APRA. Under the current APS 112 capital standard, an ADI can apply the lower 100 per cent risk weight to certain residential development exposures only if specified conditions are met; where the exposure to the borrower is more than $5 million for a single development, one of those conditions is qualifying pre-sales of at least 100 per cent of total debt. APS 112 also requires the bank to have its own policy defining qualifying pre-sales. That 100 per cent figure is a bank capital-treatment condition, not a universal rule saying every Australian development borrower must have 100 per cent presale cover. The bank's credit policy and your term sheet still decide whether it will fund the project and what it will count. The same APS 112 test also carries a debt-to-cost condition, covered in what lenders test in a development feasibility.
APRA's practice guide, APG 112, describes good practice as a bank's policy requiring pre-sale contracts to be legally binding, at arm's length, with a required non-refundable minimum deposit and appropriate sunset dates, plus a maximum proportion of presales to a single entity or individual, or to foreign purchases. It is guidance, not a rule, and APRA puts no numbers on any of it. In February 2025 APRA said its earlier presales reference "does not represent a minimum requirement or expectation", and that it "has not set minimum requirements or expectations for presales". Lenders still set presale requirements in their own policy, which is why the answer changes by lender.
APRA has also proposed lowering the qualifying pre-sales condition from 100 to 50 per cent of total debt, and replacing the presale test with a pre-lease test for build-to-let projects. Submissions closed on 7 September 2026, APRA intends to release the final standard in late 2026, and the proposed start is 1 April 2027. Until then it is a proposal, not in force, and it may change or not proceed. If you have been told APRA demands full cover, our guide on what APRA does and does not require of presale cover sets that out.
Non-bank lenders sit outside APS 112 altogether. The Reserve Bank's March 2026 Financial Stability Review reports that the most notable, though still modest, easing in non-bank lending standards has been for property developers, including less stringent presales requirements. Our non-bank lender policy matrix shows what development lenders on our panel accepted this quarter.
| Question | Bank (ADI) | Non-bank lender | Private funder |
|---|---|---|---|
| Rules it works under | APRA's capital standard APS 112 and practice guide APG 112 | Its own credit policy, outside APRA's capital rules | The funder's own terms for that deal |
| Who writes the qualifying presale definition | The bank's internal policy, which APS 112 requires it to have | The lender's credit policy | The funder, case by case |
| What that means for you | Read the definition in your term sheet; two banks can count the same contracts differently | Presale requirements are often lighter; the RBA reports some modest easing | Presales may be replaced by evidence of the exit, such as valuation and sales strategy |
Where a private funder looks past presales, it is looking at the exit instead; our insight on funding a project with no presales covers what replaces them. None of this is a lender policy for your project; the definition in your own term sheet governs.
Sources: APRA, APS 112 Capital Adequacy: Standardised Approach to Credit Risk, Attachment A paragraphs 29 and 30, effective 1 July 2025. APRA, APG 112, effective 30 September 2024. APRA, APRA clarifies its March 2017 letter regarding commercial property lending, 13 February 2025. APRA, Getting the balance right on financial resilience, Workstream 1: Credit risk capital, submissions closed 7 September 2026, final standard expected late 2026. RBA, Financial Stability Review, March 2026. All read 25 September 2026.
Which contract terms decide whether a presale counts?
Five contract terms decide whether an off-the-plan presale counts toward a development lender's presale requirement: whether the contract binds the buyer yet, who the buyer is, the deposit, the sunset date and the price. Around those five sit a handful of clauses a lender reads closely, because they decide whether it could finish and settle the project if it ever had to step in. The table brings every one of them into one place.
| Contract feature | Usually counts | Commonly shaded or excluded | Why the lender cares |
|---|---|---|---|
| Legally binding and enforceable | Signed by both parties, with the required disclosure attached | Missing disclosure or warranty paperwork that gives the buyer a way out | A contract the buyer can walk away from is not demand |
| Cooling-off | Expired, or validly waived | Still running | The buyer can still cancel for a small forfeit |
| Finance or other buyer conditions | None outstanding | Subject to finance, or to the sale of another property | The sale may never complete |
| Buyer relationship | Arm's length, unrelated to the developer | Developer, directors, family, staff or associated entities | A related sale does not prove the market will pay the price |
| Deposit amount | The full deposit the lender's policy requires | A reduced or nominal deposit | A small deposit is cheap for a buyer to abandon |
| Deposit form | Cash | A deposit bond or guarantee, where the policy says cash | A bond is a promise to pay, not money held |
| Where the deposit is held | In a solicitor's or agent's trust account | Released early to the developer | The deposit is the lender's evidence the buyer is committed |
| Sunset date | Comfortably after expected completion | Before completion is likely | An early sunset lets the buyer out if the build runs late |
| Price against the list | At or near the price the valuer supports | Heavily discounted or rebated | A discounted sale overstates what the project will realise |
| Concentration | Spread across buyers | Several lots to one buyer or entity | One default takes out a large share of the cover |
| Buyer rights if the developer becomes insolvent | None to terminate | A right to terminate on the developer's insolvency | The lender needs to finish and settle the project if it steps in |
| Assignment or nomination | Not permitted without consent | Buyer can assign or nominate freely | The lender cannot vet the buyer who will actually settle |
The table shows common practice, not any one lender's policy; your facility's definition decides which column each contract falls into. Price matters because the lender values the project on what the project will realise on completion, and a sale well under that figure pulls the whole picture down. The presale test is also only one part of the sell-side assumptions a lender tests.
Sources: APRA, APG 112 (arm's length, required non-refundable minimum deposit, sunset dates, concentration), effective 30 September 2024, read 25 September 2026; state rules as cited under the state table below.
How do NSW, Victorian and Queensland off-the-plan rules affect a presale?
State law decides when a signed off-the-plan contract actually binds the buyer and when either side can walk away from it, and a lender counts neither kind of weakness. A contract still inside a statutory cooling-off period, or one a buyer can end because a plan was not registered in time, is not yet firm demand. The table compares the three largest development markets.
| Rule | New South Wales | Victoria | Queensland |
|---|---|---|---|
| Cooling-off period | 10 business days on off-the-plan contracts; a buyer who pulls out forfeits 0.25 per cent of the price | 3 clear business days after the buyer signs, under s 31 of the Sale of Land Act 1962 (Vic); some sales and buyers are excluded | 5 business days for residential contracts; the seller may deduct up to 0.25 per cent |
| Can the buyer give up cooling-off? | Yes, with a section 66W certificate from the buyer's own solicitor or conveyancer | No; the contract cannot exclude it, so the contract counts once the period ends | Yes, the buyer can waive or shorten it, in writing |
| Deposit limit | No statutory cap stated in the sources cited here; the contract sets the deposit | On an off-the-plan contract, no more than 10 per cent of the contract price (a legal cap, not a lender minimum) | No statutory cap stated in the sources cited here; the contract sets the deposit |
| Where the deposit is held | In a trust or controlled money account for the whole contract; it cannot be released to the developer before settlement | Agent's trust account, a lawyer's or conveyancer's trust account, or a joint special purpose account; released early only once the contract is unconditional, among other conditions | Not set out in the sources cited here; the contract and your solicitor decide |
| Developer ending the contract under a sunset clause | Only with each buyer's written consent, a Supreme Court order, or where the regulations permit it, after at least 28 days' notice | Only with the buyer's written consent or a Supreme Court order | Land contracts: only with the buyer's written consent, a Supreme Court order or a prescribed situation; not linked house-and-land contracts; the reforms are under review |
| Buyer's statutory right to end the contract and recover the deposit | Within 14 days of exchange if the disclosure statement or draft plan was not attached; or within 14 days of notice if a change to a material particular materially prejudices the buyer, who can instead claim up to 2 per cent compensation | If the plan is not registered by the date in the contract, or the 18 month default | Not set out in the sources cited here; the contract and your solicitor decide |
For presales, cooling-off is the rule that moves the count fastest. In NSW and Queensland a buyer who waives cooling-off turns the contract into a qualifying candidate straight away; in Victoria the developer waits the period out. In NSW there is a second window to clear: if the approved disclosure statement or draft plan was missing when the contract was signed, the buyer can rescind within 14 days of exchange, so a lender will not count that contract until the defect is fixed. State rules change; the contract and your solicitor's advice govern your project. This is general information about each state's rules, not legal advice. The same sunset date that protects buyers also shapes presale risk for the developer, and our guide on what a sunset date means for buyers covers that side.
Sources: NSW Government, Buying property off the plan, updated 22 September 2025. NSW Office of the Registrar General, Off-the-plan, updated 31 January 2025. Conveyancing Act 1919 (NSW) s 66ZS; Conveyancing Act 1919 (NSW) s 66W. Sale of Land Act 1962 (Vic) s 31. Consumer Affairs Victoria, Buying off the plan and Property deposits for sellers, both updated 7 May 2021. Premier of Victoria, sunset clause media release, 20 March 2019. Queensland Government, Cooling-off period for residential property contracts, updated 12 May 2022. Queensland Department of Justice, Review of 2023 sunset clause legislative reforms, updated 14 October 2025. All read 25 September 2026.
Why does a lender exclude, cap or discount a presale?
A lender usually strikes or shades a presale because the buyer can still walk away, the buyer is connected to the developer, too much cover depends on one buyer or buyer type, the deposit is weaker than policy requires, or the price overstates what the lender believes the project will realise. The practical question is not simply whether a contract is signed; it is whether the contract proves independent demand and is likely to settle when the project completes.
More likely to count
- An unrelated arm's-length buyer
- Cooling-off finished or validly waived
- No finance or sale-of-property condition outstanding
- The deposit form and amount match lender policy
- The deposit is held as the contract and state law require
- The price is supportable against valuation
Common reasons for a strike or shade
- Developer, director, family, staff or associated-entity purchase
- Several lots concentrated with one buyer or entity
- A foreign buyer above the lender's own concentration limit
- A heavily discounted, rebated or incentivised sale
- A deposit bond where the definition requires cash
- A reduced or instalment deposit below the required point
- Free assignment or nomination rights
- A buyer still inside cooling-off or subject to finance
Do related-party, bulk or foreign-buyer presales count?
Related-party sales are commonly excluded or counted at less than full value because they do not prove that an independent buyer will pay the price and settle. Concentration can create a similar problem: even where each buyer is unrelated, several lots to one purchaser can leave too much of the lender's cover dependent on one settlement decision. Foreign-buyer presales can count, but the lender may cap how much of the total presale pool can come from foreign purchasers.
Foreign buyers also carry rules that are separate from lender policy. A new dwelling exemption certificate, available for qualifying developments of 50 or more dwellings other than townhouses, limits sales under the certificate to no more than 50 per cent of dwellings to foreign persons and no more than $3 million of dwellings to any one foreign person. Those are certificate conditions, not a lender's presale cap. Your lender may accept fewer foreign sales than the certificate permits; our guide on how lenders count foreign buyers goes further.
Does a deposit bond, bank guarantee or instalment deposit count?
A deposit bond, bank guarantee or instalment deposit counts only if your lender's qualifying-presale definition accepts it. Many development lenders prefer the required deposit paid in cash and held in trust; a bond or guarantee is a promise to pay rather than cash already held. Do not let the sales campaign decide this by accident. Settle three points with the lender before contracts go out: whether bonds or guarantees are acceptable, whether an instalment deposit counts before it is fully paid, and where the deposit must remain until settlement.
State law can decide part of the answer. In NSW, cash deposits or instalments on off-the-plan contracts must remain in a trust or controlled money account until settlement, and a bank guarantee or deposit bond can be used in place of cash; whether that bonded contract counts for finance is still the lender's call. In Victoria, deposit release is subject to the Sale of Land Act and the contract's status. For the buyer-side mechanics, see how deposit bonds and deposit funding work.
Does the lender count the full contract price?
Not necessarily. A lender may count a discounted or rebated sale at the net economic price, at less than face value, or not at all, and may also question a price that sits materially above the valuation evidence. For your own presale schedule, keep the headline contract price and the lender-counted value as separate columns. That prevents the common mistake of calculating cover from gross signed sales while credit is calculating it from a lower accepted amount.
Sources: APRA, APG 112 (arm's length, deposits, sunset dates and concentration); Foreign Investment Review Board, Guidance Note 6, Residential land, version 5, 1 July 2026; ATO, Exemption certificates for property developers; NSW Office of the Registrar General, Off-the-plan; Consumer Affairs Victoria, Property deposits for sellers. Read 25 September 2026.
Can a government presale guarantee help satisfy the requirement?
Potentially yes. A government presale guarantee or purchase commitment can help a project satisfy a senior lender's presale condition where the scheme is open, the project qualifies and the lender accepts the government commitment within the finance structure. It is not automatically the same as an ordinary purchaser contract: the senior lender still needs to agree how the commitment is counted for the facility.
| State | Scheme | Status at 25 Sep 2026 | Core mechanism |
|---|---|---|---|
| NSW | Pre-sale Finance Guarantee | Operating and accepting expressions of interest | NSW Government commits to buy selected dwellings in qualifying projects at a discounted value, helping satisfy lender presale conditions |
| Western Australia | Keystart Pre-sale Guarantee | Announced; Keystart says applications are intended to open in the second half of 2026 and parameters are being finalised | Keystart proposes to guarantee purchase of up to 50% of unsold homes in qualifying apartment developments to help meet senior-lender presale thresholds |
| South Australia | Apartment Fast-Track Fund | $500 million fund announced in the 2026-27 Budget; program design and eligibility are still being developed | South Australia plans an apartment presale guarantee fund, with the Government proposing to go guarantor on up to 50% of dwellings in eligible off-the-plan developments in the Adelaide CBD |
How does the NSW Pre-sale Finance Guarantee work?
The NSW program is operating now and is anticipated to run from October 2025 to September 2030. The Government can commit to purchase up to 50 per cent of dwellings in qualifying residential projects, capped at $50 million per project. For projects with fewer than 20 dwellings, support can increase to up to 75 per cent of dwellings, capped at $30 million. Registered not-for-profit community housing providers can receive support for up to 100 per cent of affordable dwellings, also capped at $30 million per project.
Only dwellings with a commitment value of up to $2 million, or $2.5 million for homes with 3 or more bedrooms, are eligible. The Government commitment is based on its discounted purchase value rather than the developer's list price. The standard program discount is at least 10 per cent to independently assessed market value, except for qualifying affordable dwellings delivered or acquired by registered not-for-profit community housing providers.
For a developer, the important finance point is the sequence: the project must already have lender indicative approval that states the presales required before construction funding can be drawn. The developer applies to the program, the Government assesses the project and developer, proposed commitment terms are agreed, and if the developer and lender accept those terms, legal documents formalise the Government commitment so the lender's presale condition can be satisfied. The lender signs a tripartite Financier Deed with the developer and the Government acknowledging the commitment, and renouncing a commitment when a private buyer signs is subject to the lender's approval.
The NSW Government does not pay a normal purchaser deposit. Lender comfort comes from the documented Government purchase commitment, not a cash deposit held in trust. Formal applicants also face an application fee, an establishment fee and, if approved, an ongoing line fee. For 2026-27 the line fee is stated as 1 to 1.5 per cent per annum on the outstanding Government commitment, with the rate set by assessed risk.
What is the Western Australian Keystart Pre-sale Guarantee?
Western Australia has committed $250 million to a Keystart Pre-sale Guarantee intended to help apartment and townhouse projects meet senior-lender presale thresholds. Keystart says it will be able to guarantee purchase of up to 50 per cent of unsold homes in an apartment development; if the guarantee is called, the homes are to be purchased at a minimum 10 per cent discount to market value in metropolitan areas. Supported projects are also expected to sell at least 30 per cent of homes below Keystart's headline property price limit. As at 25 September 2026, Keystart's public page still says applications are intended to open in the second half of 2026 and scheme parameters are being finalised. Do not rely on it as an available funding condition until Keystart confirms the current application status and your senior lender confirms how it will treat the guarantee.
What is South Australia's Apartment Fast-Track Fund?
South Australia's 2026-27 Budget establishes a $500 million Apartment Fast-Track Fund to create an apartment presale guarantee program for Adelaide. The Government has said it plans to go guarantor on up to 50 per cent of dwellings in eligible off-the-plan developments. At 25 September 2026, this is a newly announced program rather than a mature operating scheme with settled public eligibility and application rules. Treat it as an emerging option and check the final program settings before modelling it as presale cover.
Sources: NSW Department of Planning, Housing and Infrastructure, Pre-sale Finance Guarantee, updated 3 August 2026, and NSW backs even more housing with expanded Pre-sale Finance Guarantee, 11 June 2026; Keystart, Pre-sale Guarantee, current page read 25 September 2026; Western Australian Government, $250 million Pre-sale Guarantee to get more homes built, 15 April 2026; South Australian Government, 2026-27 State Budget: Housing and Premier of South Australia, Relief for families, certainty for business, 4 June 2026. Read 25 September 2026.
How many qualifying presales do you need for development finance?
There is no single Australian presale requirement that applies to every development loan. Your lender sets the required cover in its credit approval or term sheet and defines which contracts count. A common expression is qualifying presales as a percentage of debt: if the requirement is 100 per cent of the relevant debt measure, the lender must accept qualifying contracts with an aggregate value at least equal to that debt measure before the condition is satisfied.
Does APRA require every development loan to have 100 per cent presale cover?
No. Under the current APS 112, the 100 per cent qualifying-presales figure is one condition for an ADI to use the lower 100 per cent risk weight on certain residential ADC exposures above $5 million; it is not a universal lending rule for every borrower or every development facility. A bank may apply a different internal presale requirement for credit purposes, while a non-bank or private funder is outside APS 112 and applies its own policy.
What do 80%, 100%, 110% or 120% presale cover actually mean?
They describe the value of lender-counted qualifying presales compared with the debt measure named in the test; they do not mean that 80, 100, 110 or 120 per cent of the project's apartments are sold. If the relevant debt measure is $15 million, the arithmetic is straightforward:
| Required cover | Qualifying presale value | Calculation |
|---|---|---|
| 80% | $12,000,000 | $15,000,000 × 0.80 |
| 100% | $15,000,000 | $15,000,000 × 1.00 |
| 110% | $16,500,000 | $15,000,000 × 1.10 |
| 120% | $18,000,000 | $15,000,000 × 1.20 |
The important word is relevant. APS 112 uses total debt for its regulatory capital test. Your lender's credit approval may define its borrower-facing presale test differently, so confirm the denominator in the actual term sheet instead of assuming the APRA measure and your facility measure are identical.
Can development finance be approved before you have enough presales?
Yes. A lender can issue an indicative approval, formal approval or signed facility that is still subject to a presale condition before the first construction drawdown. That distinction matters: finance approval does not necessarily mean construction funds are available to draw immediately. The operative answer sits in the conditions precedent and covenants in your approval and loan documents.
| Finance stage | What the presale shortfall can mean | What to check next |
|---|---|---|
| Indicative or credit approval | The lender can still approve the proposal subject to achieving a stated qualifying-presale condition | Exact dollar or percentage target, qualifying definition and deadline |
| Formal loan documents | The presale test can remain an unsatisfied condition precedent even after documents are signed | Conditions precedent, waiver mechanics and facility expiry |
| Before first construction drawdown | The lender can refuse to release construction funds until the condition is satisfied, waived or restructured | Updated qualifying register, solicitor evidence and any approved cure |
| After construction has started | A rescission or lost contract is dealt with under the facility covenants; replacement sales, extra equity or another remedy may be required and a later draw can be affected | Reporting covenant, default/remedy provisions, draw conditions and lender consent |
How do you calculate the cover the lender will actually see?
Start with the lender's accepted value for each contract, not the agent's headline sales total. Credit may exclude a contract entirely or count less than the face value because of rebates, incentives, unsupported pricing, related-party buyers, purchaser concentration, foreign-buyer limits or a deposit structure the policy does not accept. Whether GST is included or excluded, and whether the denominator is total debt, a facility amount or another defined measure, must be taken from the term sheet or facility definition rather than assumed.
- List every exchanged contract. Record buyer, lot, price, deposit, cooling-off status, conditions and sunset date.
- Apply the lender's definition. Strike contracts that do not qualify and identify contracts the lender will count only partially.
- Use the lender-counted value. Deduct rebates, incentives or unsupported value where credit has adjusted the contract price.
- Check the measurement basis. Confirm whether the term sheet tests total debt, committed debt, a stated dollar amount or another measure, and whether contract values are measured on a GST-inclusive or GST-exclusive basis.
- Divide qualifying value by the required measure. Keep that figure beside the agent's gross sales total so the gap is visible.
| Step | Contract value | What the lender does |
|---|---|---|
| Exchanged contracts on the sales schedule | $7,200,000 across 12 contracts | Gross sales reported by the selling agent |
| Sale to a director's family company | $600,000 struck | Not treated as arm's-length demand |
| Contract still inside cooling-off | $580,000 struck | Buyer can still cancel |
| Contract with a reduced deposit | $620,000 struck | Below the deposit required by this example's policy |
| Qualifying presales | $5,400,000 across 9 contracts | Value accepted for this example |
| Facility debt | $6,000,000 | Debt measure named in this example's term sheet |
| Qualifying presale cover | 90 per cent | $5,400,000 divided by $6,000,000 |
In this example the developer reads 120 per cent cover from the sales report while the lender sees 90 per cent. That gap is exactly why the presale schedule should carry a separate lender-counted value column. Every figure is illustrative; your term sheet sets the real test and required level. For the conditions that sit beside presales, see what lenders test in a development feasibility.
What happens if you do not have enough qualifying presales, and how do you fix it?
If qualifying presales are a condition to first drawdown, falling short can stop the lender releasing construction funds until the condition is satisfied, waived or restructured. If a counted presale falls over after the facility has already settled, the consequence depends on the facility agreement: the lender may require a replacement contract, updated cover calculation, additional equity or another remedy, and in some cases can pause a later drawdown. A failed presale does not automatically mean the facility is cancelled; timing and the loan documents matter.
What should you do when the lender strikes contracts from the presale schedule?
- Get a contract-by-contract reason. Ask credit to mark every contract as counted, shaded or struck and state why.
- Reconcile the gross schedule to the lender schedule. Do not work from the agent's total alone.
- Separate fixable defects from structural ones. Cooling-off, an unsatisfied condition or a deposit top-up may be curable; a related-party sale may need replacement.
- Have the solicitor fix legal-document issues. Do not vary sunset, disclosure, assignment or buyer rights without legal advice.
- Recalculate cover before selling more stock. Work out the exact dollar shortfall against the lender's measurement basis.
- Choose the cheapest cure. That may be replacing contracts, selling more lots, adding equity, using an accepted Government program, or changing lender.
| Reason it was struck | Possible fix | Who usually needs to act |
|---|---|---|
| Cooling-off still open | Wait for expiry or, where state law permits, obtain a valid waiver | Buyer and buyer's solicitor or conveyancer |
| NSW disclosure statement or draft plan missing | Use the approved disclosure material for future contracts and obtain legal advice on any existing defect | Developer's solicitor |
| Finance or sale-of-property condition | Wait until the condition is satisfied or replace the buyer | Buyer, selling agent and solicitors |
| Buyer related to the developer | Replace the sale with an arm's-length buyer if the lender will not accept it | Developer and selling agent |
| Reduced or incomplete deposit | Top up to the amount and form the lender requires, where the contract allows | Buyer and solicitors |
| Deposit bond where policy requires cash | Replace the bond with cash or obtain written lender acceptance | Lender, buyer and solicitors |
| Sunset date too early | Obtain legal advice on a valid variation if the buyer agrees | Both parties' solicitors |
| Heavy discount or rebate | Use the lender's accepted net value and price later stock consistently with valuation evidence | Developer and selling agent |
| Too many lots to one buyer | Diversify later sales and confirm how much concentration the lender will accept | Developer, lender and selling agent |
When does the lender test qualifying presales?
The critical test is commonly before the first construction drawdown where presales are a condition precedent, but it can continue after settlement. Lenders may ask for updated sales schedules, contract copies, deposit confirmations and solicitor certificates during the build, particularly before later drawdowns or after a rescission, sunset, variation or buyer replacement. Treat the qualifying-presale register as a live credit document, not a one-off attachment to the original application.
What evidence does a lender usually want?
A development lender commonly asks for a current presale schedule, the signed contracts, evidence of each deposit or accepted substitute, confirmation of where deposits are held, and a solicitor's certificate or report confirming that the contracts meet the lender's required form and conditions. The exact evidence list is lender-specific.
- Agree the contract form before launch. Send the draft contract and proposed sales terms to the lender or broker before the campaign starts.
- Brief the selling agent in writing. State the required deposit, buyer restrictions, rebate policy and any bond or assignment limits.
- Keep one lender-ready register. Record buyer, price, lender-counted value, deposit, cooling-off, conditions, sunset and status.
- Report changes early. Rescissions, variations and replacements should reach the lender before they surprise the next drawdown request.
What if the shortfall remains after the fix?
If the contracts cannot be repaired, the remaining options are to sell more stock on the lender-approved form, add equity, reduce the senior debt if the structure allows it, use government presale support where the project qualifies, stage the project where that genuinely changes the finance requirement, or compare a lender with a lower or different presale requirement. Mezzanine or preferred-equity capital can sometimes alter the senior funding structure, but it does not automatically make a senior lender ignore its presale policy and can materially change cost and risk. A lower-presale lender may compensate by asking for lower leverage, more equity, stronger valuation support, more interest cover or a different exit strategy, so compare the whole facility rather than the presale percentage alone. See development finance with few or no presales and what happens when a counted presale falls over.
From our broking experience (indicative, not a lender policy, as at September 2026)
- The damaging mismatch is usually discovered when the developer's gross sales report is treated as if it were the lender's qualifying register.
- Deposit bonds, reduced deposits, rebates and buyer concentration are much cheaper to solve before the campaign than after credit has conditioned the facility.
- The cleanest process is to have the lender review the contract form and sales rules first, then brief the solicitor and selling agent to sell to that framework.
Every lender writes its own definition; the operative test for your project is the facility's approval, term sheet and loan documents.
Where should a developer go next?
- A presale fell over after approval: can the lender stop a drawdown?
- Can I get development finance with few or no presales?
- What else does the lender test besides presales?
- How are foreign-buyer presales treated?
- What if the facility expires before construction or settlements finish?
- Compare development finance options for the project itself
A qualifying presale is not simply a signed contract. It is a contract your lender accepts under its definition, and the lender's qualifying register can be materially lower than the agent's gross sales schedule. A quoted requirement such as 100% or 120% cover refers to lender-counted qualifying value against the debt measure named in the test, not the share of apartments sold. APRA's current bank capital rules contain a 100 per cent qualifying-presales condition for certain residential development exposures above $5 million to receive the lower risk weight, but that is not a universal borrower minimum. Your approval and term sheet decide the credit requirement, and government presale programs can help only where the scheme is available and the senior lender accepts the commitment. The safest process is to agree the contract form, deposit rules and buyer limits before launch, then keep the lender-counted presale schedule live through construction.
Key takeaway: sell to the lender's definition from day one; fixing presales after approval is slower and can delay first or later drawdowns.Frequently Asked Questions
In property development finance, a qualifying presale is an off-the-plan sale contract your lender agrees to count toward its presale requirement: binding, unconditional, at arm's length, with an acceptable deposit and a sunset date beyond expected completion.
Your lender decides. APRA requires banks to define qualifying presales in their own policy, and has said it sets no minimum presale requirement; non-banks and private funders apply their own credit policy.
Usually not at full value. A lender may exclude or shade a sale to the developer, a director, family member or associated entity because it does not provide the same evidence of independent market demand as an arm's-length sale.
Presales to foreign buyers can count up to the lender's own limit, and a FIRB new dwelling exemption certificate carries its own limit on foreign sales; see our foreign-owned developer guide.
A contract secured by a deposit bond counts only if your lender's definition accepts bonds; many development lenders prefer the deposit paid in cash and held in trust.
A lender will commonly wait until cooling-off has expired or, where state law permits, has been validly waived, because the buyer can otherwise still cancel the contract.
Usually not until the finance condition has been satisfied or removed, because the buyer still has a contractual path not to complete the purchase. Your lender's written definition controls the answer.
Not necessarily. A lender may count the net price after rebates or incentives, shade the value further where valuation evidence does not support it, or exclude the contract under its policy.
It depends on the facility definition. Unrestricted assignment or nomination can weaken the lender's ability to assess who will ultimately settle, so some lenders require consent or treat freely assignable contracts as non-qualifying.
Add up the value your lender counts for each qualifying contract, after striking or shading the ones that fail its definition, and divide that total by the debt measure your term sheet names.
The NSW Pre-sale Finance Guarantee can stand in for part of your presales if your lender accepts the Government's commitment, up to 50 per cent of dwellings on larger projects and 75 per cent on projects under 20 dwellings; the commitment is renounceable, so private sales can replace it.
Fix the contracts your lender struck, sell more lots to arm's-length buyers on the approved contract form, add equity, use an accepted government presale program where the project qualifies, or compare a lender with a lower presale requirement.
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