In a move set to ease capital pressures on banks, the Australian Prudential Regulation Authority (APRA) has proposed lower standardised risk weights for key lending categories, potentially freeing up capacity for infrastructure, corporate, and property development finance.
The changes target large domestic public infrastructure exposures, high-quality unrated corporate lending, and residential land acquisition, development, and construction (ADC) loans. For ADC, APRA plans to ease pre-sales requirements from 100% to 50% of total debt, with pre-lease alternatives for build-to-let projects. Implementation is eyed for April 2027.
Sydney lenders and brokers are welcoming the proposals amid a commercial property transaction surge to $19 billion in H1 2026, led by industrial and retail deals. Greater Western Sydney business lending grew 11.1% over the past year, outpacing NSW averages, fuelled by transport, health, and construction.
A senior credit representative noted: “This could meaningfully improve feasibility for townhouse and mixed-use developments in Sydney’s growth corridors, where pre-sales hurdles have constrained supply.”
With RBA cash rate steady at 4.35% and growth forecasts subdued (Deloitte sees 1.3% for 2026-27), the reforms offer a timely boost to credit flow without compromising stability.
Watch for finalisation in H2 2026 — a potential game-changer for independent brokers tendering deals in a competitive big-four landscape.