Australia’s housing supply problem is a familiar story. What’s less familiar is the opportunity it’s quietly creating for boutique developers.
The National Housing Supply and Affordability Council projects Australia will fall short of its Housing Accord target by approximately 262,000 dwellings, with new supply expected to remain subdued well into 2027. Meanwhile, a blend of factors is pointing buyer and investor demand squarely toward new residential stock.
The buyers are coming. The question is whether your developer clients will be ready to build for them.
The demand is shifting toward new stock
Rental vacancy rates remain at historic lows and the pipeline of new stock hasn’t kept pace. Policy is now adding another layer of urgency. The Federal Budget has proposed restricting negative gearing on established properties for purchases made after 12 May 2026 — meaning investors who want to retain those tax benefits must look to new builds. First home buyer programs are pulling a new cohort of buyers in the same direction.
It’s a meaningful shift. As CBA Senior Economist Trent Saunders put it: “Retaining negative gearing for new dwellings should redirect some investor demand from established properties toward new builds, supporting construction activity, particularly for apartments where investor pre-sales are important.” For boutique developers active in metro markets, that’s a genuine window of opportunity.
Why the banks don’t hit the mark
Here’s the frustrating part: the developers best placed to deliver this new stock are often the same ones the banks keep turning away. Major lenders typically require pre-sales covering 70–100% of the debt facility before they’ll touch a construction loan. Not to mention income documentation built for PAYG employees, approval timelines that stretch to weeks, and minimum project sizes that price out smaller builds.
The market has noticed. 90% of Australian SMEs are now open to non-bank lenders — up from just 44% in 2018. This isn’t a risk story; it’s a structural mismatch. Most boutique developers have solid projects, strong assets and a clear construction exit. Traditional lending just wasn’t designed with them in mind.
The construction finance conversation to have now
This is exactly the time to be having that conversation with your developer clients. Demand for new residential construction is coming from multiple angles and boutique developers who can move quickly have a real opportunity on their hands. That’s where brokers can genuinely add value, and where the right lender makes all the difference.
Where Prime Capital fits
Prime Capital’s Business Construction loan is built for SME developers who need to move at the pace of the market. How it works is simple: no pre-sales, and no long application forms. Just fast answers from BDMs who sit right alongside the credit team.
Brokers can expect approvals in as little as 24 hours and settlements in 3–4 weeks, with warehouse-backed funding clients can count on. Loan amounts from $1M to $10M.
Fast. Simple. Certain.
Got a construction scenario?
Submit it via Prime Approve for approval within 24 hours.
Sources
- National Housing Supply and Affordability Council, State of the Housing System 2026 (nhsac.gov.au)
- Trent Saunders, Senior Economist, Commonwealth Bank of Australia, ‘2026 Budget: Updated Housing Outlook’, May 2026 (commbank.com.au)
- Feasly, Construction Finance for Property Developers: Complete Australia Guide 2025 (feasly.com.au)
- ScotPac, SME Growth Index Report, 2024 (scotpac.com.au)
