CBA Provides Australia’s First Green Rent-Based Construction Loan As Land Prices Soar

‘Indi Sydney City’ will be the first nationwide residential project to use a $ 130 million green loan offered by the Commonwealth Bank.

The partnership between the Commonwealth Bank and Oxford Properties Group (Oxford) will help build one of Australia’s most sustainable high-rise residential buildings.

Delivered and managed by Indi, the development is expected to be a 5 star Green Star building, carbon neutral in operations.

Indi Sydney City will also be the first to obtain a NABERS energy rating for construction-to-lease developments.

To qualify for the green loan, Investa – owner of Oxford and Indi – collaborated on a green finance framework with borrowings transparently allocated to qualifying green assets.

The framework has been developed in accordance with the principles of green loans which are accepted as the main guideline for issuing green loans globally.

Indi Sydney City embraces sustainability outcomes throughout design, construction and operation through material choices, on-site renewable energy production and rainwater reuse.

Commonwealth Bank Institutional Banking & Markets Group Director Andrew Hinchliff said supporting the development of the green infrastructure needed for the economy of tomorrow is a strategic priority for the bank.

“The way Australians live, work and play are changing and people will be looking for new, more flexible lifestyles that can bring them closer to their jobs,” said Hinchcliff.

“Properties built for rental will play a key role in Australia’s future.”

Staggering land prices leave Australians thinking about next step

The Housing Industry Association (HIA) reported that the cost of blocks of land has risen twice as fast as the cost of building materials.

HIA Chief Economist Tim Reardon said that while construction costs contributed 4% of the total cost of building homes in the past fiscal year, land prices rose 8 , 5%.

“The supply of land has been tight over the past two decades and the surge in demand in 2020 has seen land prices in Sydney rise 27.1% in the past year alone,” Mr. Reardon.

The strength in demand for land is expected to continue through 2022 and into 2023 according to Reardon.

“As land is a key component of housing, this price increase has been a key factor in the rise in the cost of houses and the decline in housing affordability,” he said.

CoreLogic Research Director Tim Lawless said HomeBuilder has driven demand forward as land sales increased in the second half of 2020.

“Rising land prices and residential construction costs, as well as the value of existing homes, which are rapidly increasing, are expected to add further pressure to the housing affordability issues that are becoming increasingly evident,” said Mr. Lawless.


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To build a home ? The table below shows construction loans with some of the lowest interest rates in the market.

Lender

Rate type Gap Redraw Ongoing charges The initial costs LVR Lump sum reimbursement Additional refunds Pre-approval

Variable More details
GET A REDUCED GREEN RATE

Real estate loan for green construction (interest only)

  • Interest Only during construction
  • No monthly, annual or ongoing fees
  • Get Australia’s lowest rate construction loan when you go green
Variable More details
FREE RECOVERY EASE

Basic real estate loan (principal and interest) (LVR 70% -80%)

Variable More details
EASY ONLINE REQUEST

Garden investment loan (principal and interest) (LVR
  • No administration fees
  • Unlimited additional refunds
  • Unlimited free withdrawals

Variable More details

Housing loan for construction (LVR
  • Fast turnaround times, can meet a 30 day settlement
  • No ongoing charges
  • Unlimited additional refunds

Variable More details

Rocket Repay mortgage (interest only)

Variable More details

Standard variable home loan (interest only)

Variable More details

Standard variable home loan (interest only)

Variable More details
FAST TURNAROUND TIMES AND FLEXIBLE LOAN OPTIONS

Basic investment loan (principal and interest) (LVR

Basic criteria: a mortgage in the amount of $ 400,000, variable, fixed, principal and interest (P&I) with an LVR (loan-to-value) ratio of at least 80%. However, the table “Compare mortgages” allows calculations to be performed on variables selected and entered by the user. All products will list the LVR along with the product and price which is clearly posted on the product supplier’s website. Monthly repayments, once the basic criteria are changed by the user, will be based on the advertised rates of the selected products and determined by the loan amount, type of repayment, loan term and LVR entered by the user. /you. Prices correct as of October 27, 2021. See disclaimer.


Image by Pawan Kawan via Unsplash

The entire market was not taken into account in the selection of the above products. Instead, a smaller part of the market has been envisioned, which includes the retail products of at least the Big Four banks, the Top 10 customer-owned institutions, and Australia’s largest non-banks:

Products from some vendors may not be available in all states. To be taken into account, the product and the price must be clearly published on the website of the supplier of the product.

In the interest of full disclosure, Savings.com.au, Performance Drive, and Loans.com.au are part of the Firstmac group of companies. To learn more about how Savings.com.au handles potential conflicts of interest, as well as how we are paid, please click on the links on the website.

*Comparison rate is based on a loan of $ 150,000 over 25 years. Please note that the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as withdrawal fees and cost savings such as fee waivers are not included in the comparison rate but may influence the cost of the loan.


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