Non-Bank Development Funding in FY27: A Market Read
Non-Bank Development Funding FY27 | Switchboard Finance
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Development Finance · Non-Bank Lending · FY27
Non-Bank Development Funding in FY27: A Market Read
Going into the new financial year, the question for developers is not just what a project costs, but who will fund it and on what terms. This is a market read on non-bank development funding for FY27: where lender standards are sitting, and what that means before you break ground.
Quick Answer
Going into the new financial year, non-bank lenders are broadly easing on development finance rather than tightening, and they read the project, not the payslip. A workable feasibility and a credible exit strategy carry the file. Speak to a broker about your own project before you commit.
Where non-bank development funding sits going into FY27
Going into FY27, non-bank lenders are, on balance, easing on development finance rather than tightening it. That runs against what a lot of developers expect after a couple of cautious years, and it changes how you should approach the funding conversation for your next project.
The shift is modest, not a flood of cheap money. Non-bank standards have eased for developers (RBA, as at March 2026), with some funders relaxing presales requirements and trimming the collateral they ask for. Underneath that, the appetite to build has not gone away: residential approvals have held up over the past year even as the monthly figure wobbles, so there are still projects looking for funders. Where this commonly lands is a market where a well-prepared file has more genuine options than it did, provided the deal itself stacks up.
Development finance is, and stays, development finance: it is assessed on the project, not the payslip. Easing standards widen the door a little; they do not change what is being underwritten, which is the feasibility, the equity and the exit. The rest of this read is about how to bring a file that walks through that open door.
Reading the FY27 development market
The clearest way to read the FY27 development market is to look at what is being approved and who is funding it, because both point the same way: there is work in the pipeline, and non-bank funders are leaning in to back it. The figures below set the scene before you size a single facility.
Approvals say demand has not collapsed, and the Reserve Bank's own read says the funding side is loosening at the margin. The RBA Financial Stability Review notes that non-bank lenders have eased standards most notably for property developers, including less stringent presales requirements, while still making up only a small share of the overall financial system.
How non-bank development funding is structured
Non-bank development funding is structured around the project's numbers, which is why it is assessed on the project, not the payslip: the lender sizes the facility against the end value and the build cost, then sets the leverage from there. Two ratios do most of the work, and a clear exit underwrites the rest.
Senior debt typically sits around 65 to 70% of gross realisation value (indicative, varies by lender), while loan to cost commonly runs 65 to 80% (illustrative). The balance is your equity, and a credible exit is the first thing underwritten, because the loan is repaid from the sale or the refinance of the finished project. Funds are released in staged drawdowns against verified progress, so a quantity surveyor sign-off and a clean feasibility carry the file. Where this commonly lands is simple: get the feasibility and the exit strategy right, and the structure follows.
Stronger Fit
- A feasibility that stacks at conservative end-value and cost assumptions
- Real equity behind the land or the project, not just the site
- A dated, credible exit, a sale or a refinance, that sets the facility term
Gets Tricky
- A deal that only works if every sale lands at the top of the range
- Thin equity, so there is little behind the facility for a lender to read
- No exit beyond hope, which leaves the term with nothing to anchor to
What this means for your next project
For your next project, the practical takeaway is that the funding market is working in your favour at the margin, but it rewards preparation, not optimism. With non-bank standards a little easier, the developers getting the cleaner terms are the ones who bring a dated exit and a feasibility that holds at conservative numbers, then let one broker run the whole funding stack.
The wider tax reform sits in the background of every FY27 project decision: the Budget 2026-27 property tax reform keeps full negative gearing for new builds from 1 July 2027, which supports the case for building over buying established stock, though that is a tax question for your accountant rather than a funding one. On the funding side, a finished project you intend to hold can refinance onto a commercial property loan, and the full picture across development, commercial and private funding is mapped in the property lending hub. If you would rather pressure-test a specific deal, a build that does not lean on presales is walked through in development finance without presales, and the mechanics are set out in how development finance works.
The FY27 read on non-bank development funding is a cautiously open one: standards have eased at the margin, most notably for developers, while approvals show there is still work in the pipeline. None of that changes the fundamentals a funder underwrites, which are the feasibility, the equity and a dated exit. Read on the project, not the payslip, the deals that clear are the ones that stack at conservative numbers and carry a credible way out. The wider stack, development, commercial and private, is mapped in the property lending hub.
Key takeaway: non-bank development funding is a little easier to access in FY27, but a conservative feasibility and a dated exit still decide whether your project gets funded.Frequently Asked Questions
Non-bank lenders are, on balance, easing on development finance rather than tightening it as FY27 begins, according to the Reserve Bank's March 2026 read, which noted the most notable easing has been for property developers. The shift is modest and mainly shows up as less stringent presales requirements and slightly lower collateral demands, not cheaper money for weak deals. You can see how the product is structured on our development finance page and how the headline sizing metric works in the gross realisation value glossary entry.
A non-bank development facility is not sized to a single loan to value figure; it is sized to the project, with senior debt typically around 65 to 70 percent of gross realisation value and loan to cost commonly 65 to 80 percent, both indicative and varying by lender. Your equity makes up the balance, and the exit sets the term. The two ratios are explained in the gross realisation value and loan to cost glossary entries.
Non-bank lenders do not always require presales on a development, and the Reserve Bank noted in March 2026 that presales requirements had eased for some developers. Whether you need them still depends on the project size, the location and the funder, so a no-presales structure is a conversation, not a default. A build that does not lean on presales is walked through in our guide to development finance without presales.
Non-bank development finance is paid out in staged drawdowns against verified progress rather than as a single lump sum, so the funds are released as the build hits agreed milestones. A quantity surveyor usually signs off each stage before the next drawdown, which protects both you and the lender. The mechanics are set out in our guide to how development finance works and in the staged drawdowns glossary entry.
A development loan is assessed on the project rather than your personal income, reading the feasibility, the gross realisation value and the total development cost, with a credible exit setting the facility term. Your own trading position still matters for credibility, but the deal stands or falls on whether the project numbers stack at conservative assumptions. The exit that anchors the whole file is explained in the exit strategy glossary entry, and the product sits on our development finance page.
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