Numerous banks have withdrawn from funding the village sector and those remaining are testing all assumptions aggressively. While DA projects are being shelved, he sees a glimmer of light, especially if villages up to $600,000 thanks to the first home buyers grant. Pessimistically however, this is likely to slow down with the drying up of the grant. BankWest's observation is that operators are likely to achieve one sale per month; they recommend operators meet the market in price and get stock moving. In staged developments they want 50% presales (deposits) before commencement and each stage should be limited to 10-15 ILUs. They prefer the community facility only to be commenced when 30 to 50 ILUs had been sold. They are very cautious of medium rise because it's hard to achieve presales.
Before the Global Financial Crisis the average bank margin on funds all as 175 basis points; today it is 250 basis points.
