This article was originally posted by The Urban Developer on 7th October 2021.
The finance platform is forging a path for Australian lenders to diversify their portfolios with attractive assets from across the ditch.
Wefund has opened its first overseas office in Auckland, one of the hottest property markets across the Tasman. Like Sydney, average house prices are well over a million dollars and the two cities share many similarities when it comes to real estate.
Strong price growth has triggered affordability concerns in both Sydney and Auckland, while regulators in both countries have previously intervened through macro-prudential tools to keep markets from overheating.
Strong pipeline of projects
In December 2020 the NZ government released the National Construction Pipeline report, which provides a forecast for national building and construction work across residential and commercial markets.
Despite a short-term reduction in residential building consents due to the pandemic, a return to growth is anticipated from 2024.
The report predicts that over 73,000 dwelling units are expected to be consented in Auckland over the six years from 2020 to 2025.
From 2023, a gentle increase in residential building consents is anticipated for Wellington, the nation’s capital city. Nearly 11,000 dwelling units are expected to be consented between 2020 and 2025.
Major opportunity for Australian lenders
The launch of Wefund NZ presents a significant opportunity for Australian lenders looking to capitalise on the strength of New Zealand’s housing market.
The platform already partners with more than 70 Australian lenders, many of which are smaller non-banks and private funders.
Wefund co-founder Marshall Condon said smaller lenders are increasingly looking to New Zealand as an attractive market.
“The New Zealand property market shares many characteristics with Australia, including demand for high-density dwellings, a strong appetite among property investors and a competitive property development industry,” Mr Condon said.
“Expanding into a new market is an expensive exercise for lenders. With Wefund they can effectively have a presence in New Zealand and fund developers without needing to physically set up an office there,” he said. “This is already proving to be an attractive proposition for some of our non-bank lending partners.”
The New Zealand team will be led by Kris Sligo, a born and bred Kiwi who held senior positions in commercial banking at ANZ and within the non-bank sector in Melbourne and Auckland prior to joining Wefund.
Mr Sligo will manage a team of expert analysts and credit managers, dedicated to understanding the individual nuances of every project and providing feasibility analysis to maximise each development’s profitability.
“Wefund has invested heavily in its proprietary platform, which reduces turnaround times significantly compared with other more established channels,” he said. “We aim to provide lending terms within a week of receiving full details of a development proposal.”
He noted that Wefund only accredits trusted lenders who have a proven track record of delivering reliable funding.
“Developers can have confidence in Wefund’s accredited panel of lenders, who are able to provide funding of up to $250m per project, with higher LVR thresholds,” Mr Sligo said.
The NZ team will also include Tammy Crause, who heads up business development, sales, client relationship management and operations.
“We’re excited about bringing Wefund to the New Zealand market and providing a better experience for developers and lenders,” Ms Crause said.