Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter

Real estate giant predicts non-bank growth across APAC

Non-bank lending is set to expand across the Asia-Pacific region, with increasing opportunities for Australia, according to a new report by real estate group CBRE.

The report, Asia Pacific Real Estate Debt Market – Tighter Regulation Brings Opportunities, highlighted that following the global financial crisis, real estate bank lending in the Asia-Pacific (APAC) region significantly moderated due to international regulators implementing stricter capital requirements and cooling measures imposed by domestic authorities to curb rapidly rising property prices.

It noted that these actions have subsequently reduced the accessibility of bank lending in the majority of major APAC markets, prompting investors and property companies to seek out alternative options in the form of non-bank lending.

Advertisement
Advertisement

“The reduction of real estate lending by banks and limitations inherent to public bond issuance have created the undeniable demand for a dynamic non-bank lending market in the region,” CBRE Research Asia Pacific senior director Ada Choi said.

“Given the recent volatility in the Asian stock markets, it can be argued that debt investments can, at opportune moments, provide higher returns than equity in property, and hence has its merits as an alternative long-term investment vehicle.”

Within Australia, the report noted strong demand from borrowers looking to lock down long-term, low-interest loans in anticipation of impending rate hikes.

“Australia stands out amongst regional mature markets as institutional investors can maximise the significant pool of long-tenor commercial borrowers in a low-risk and transparent environment, matching lenders’ long-term liability periods and providing a hedge against equity price volatility,” said Nick Crockett, CBRE Capital Advisors director for the Asia Pacific.

While the non-bank lending environment in the APAC region is “profitable and poised to grow”, the report noted that it still holds significant challenges in managing execution and administrative inefficiencies in emerging markets.

“New entrants into the debt market would be best to seek the knowledge and market expertise of real estate debt and structured finance service providers,” Mr Crockett said.

“Apart from advising on varying licensing requirements across domestic markets, qualified service providers can likewise provide guidance in navigating country-specific challenges.”

Real estate giant predicts non-bank growth across APAC
mortgagebusiness

Latest News

The recent downturn in the property market has not been enough to ease affordability pressures, with Australia’s housing remaining among t...

The SME challenger bank has hit the $1-billion mark in deposits, nine months after receiving its banking licence. ...

Australia’s annual rate of GDP growth is set to continue floundering over the coming decade, compounded by a lack of monetary policy suppo...

FROM THE WEB
podcast

LATEST PODCAST: New government loans and grants for SMEs

Do you think Australia will move to quantitative easing this year?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.