Pre-Sales and Construction Finance in Australia: How Many Do You Need? (2026)

The number of pre-sales a developer needs before a lender will commit to construction finance has changed significantly over the past decade, and 2026 data shows the market is shifting again. This article covers what lenders currently require, how the bank and non-bank markets differ, what makes a pre-sale qualifying, and where distribution into a buyers agent network fits into the sequencing.

Why Lenders Want Pre-Sales

Construction lending is riskier than investment lending against a completed asset. The security is a building that does not yet exist. A lender advancing $10 million to build 40 apartments has no completed property to sell if the project fails halfway through.

Pre-sales address this in two ways. First, they demonstrate market demand: if 30 buyers have committed unconditionally at a real price, a lender has evidence that the product is saleable. Second, they provide cash flow certainty: settlements from pre-sold contracts will repay the construction facility as the building completes, reducing or extinguishing the lender's exposure.

BRI Ferrier, a restructuring and advisory firm, summarises the shift neatly: before the global financial crisis, lenders typically required around 30% of stock to be pre-sold; the requirement for most bank lenders is now approximately 100% of the debt facility covered by pre-sales. That shift reflects how dramatically post-GFC bank credit policy tightened around residential development.

How Much Is Enough: The Bank Standard

For major bank lenders, the standard is now approximately 100% of the construction debt facility covered by qualifying pre-sales (Feasly's presales guide; BRI Ferrier). Feasly puts the qualifying pre-sales band for banks at 100% to 120% of debt cover.

What that means in practice depends on your project's LVR and the scale of the debt. A developer borrowing $8 million against a $15 million gross realisation needs pre-sales whose contracted aggregate value, less the senior debt, demonstrates full coverage of that $8 million. The 100% to 120% band means most bank credit teams want a modest buffer above exact debt coverage.

The 100% of debt cover standard means that a developer who has not yet sold a single apartment is effectively shut out of major bank construction funding, regardless of their track record or the project's location. That is a material constraint compared to pre-GFC conditions.

The 2026 Shift: Non-Bank and Private Lenders Moving

The Stamford Capital 2026 Real Estate Debt Capital Markets Survey (reported by The Urban Developer; surveyed across banks, second-tier banks, non-banks and private lenders between March and April 2026) captures where the market is heading:

• 37% of construction lenders now require zero pre-sales before committing, up from 29% in 2025 and 18% in 2023.
• The 60% to 100% pre-sale bracket fell from approximately 45% of lenders in 2021 to 8.1% in 2026.
• 62% of respondents expect major banks to increase their construction lending activity.

The direction is clear: a growing share of the non-bank and private lender market is prepared to fund projects with minimal or no pre-sales, while the major bank standard remains around full debt coverage. The trade-off is cost and structure, covered below.

Bank vs Non-Bank: The Trade-Off

Major Banks

Major banks applying the 100% to 120% debt cover standard offer the lowest construction finance rates. Feasly cites bank construction rates at approximately 5.5% to 7.5% per annum. Approval timelines run 8 to 12 weeks (Feasly).

The cost advantage is significant. But the pre-sales hurdle is real, and the timeline means a developer needs to begin the application process well before the project is ready to start construction.

Non-Bank and Private Lenders

Non-bank lenders require 0% to 50% pre-sales coverage (Feasly), which gives developers with early-stage projects genuine access to funding. The rate is materially higher: Feasly puts non-bank construction rates at approximately 9.95% to 11.95% per annum. Approval timelines are shorter, at 2 to 6 weeks (Feasly).

Private lenders, as Switchboard Finance notes, tend to assess the gross realisation value of the project, the project margin and the developer's exit strategy rather than focusing primarily on the number of pre-sold contracts. They typically apply lower LVRs to compensate for the absence of pre-sales as a risk mitigant.

The practical question for a developer is whether the extra funding cost of a non-bank facility, relative to a bank facility, is offset by being able to start construction earlier. That calculation depends on the project's margin, construction timeline and the cost of delay. It is a question for your broker or adviser to model against your specific deal, not a generalisation that applies uniformly.

What Counts as a Qualifying Pre-Sale

Lenders commonly apply rules along the following lines when assessing whether a pre-sale qualifies toward the coverage threshold (Feasly; single-sourced, framed as a guide not a guarantee):

• Deposits of 10%, non-refundable, held as cash or a bank guarantee in trust.
• Unconditional contracts, at arm's length between unrelated parties.
• Sunset dates set at least 9 to 12 months beyond the forecast practical completion date.
• Caps on foreign purchasers, with around four per project being a common ceiling.
• No deposit bonds accepted in lieu of cash.
• Bulk purchases above two units per buyer treated as non-qualifying.
• Related-party sales (developer purchasing via associated entity, family members at discounted terms, etc.) are non-qualifying.

These rules vary between lenders. Some banks apply stricter caps on foreign purchasers; some non-banks are more flexible on deposit structure. The Feasly-sourced list above is illustrative, not universal. Your broker should confirm the specific credit policy of each lender you are approaching.

A key point from the arm's length and non-related-party rules: a pre-sale generated through an independent buyers agent, where a genuinely unconnected purchaser with their own representation commits to a contract, is structurally well-placed to qualify. A sale to a related entity, to an investor club coordinated by the same channel that is being paid an embedded commission, or to a bulk purchaser holding two or more units will generally not qualify.

The Sunset Date Problem

A frequently overlooked aspect of pre-sale quality is the sunset clause. A pre-sale with a sunset date that expires before practical completion is not a pre-sale anymore; it is a contingent liability. If the project overruns and sunset dates start tripping, purchasers can rescind under the contract terms, potentially collapsing the pre-sales register and putting the construction facility in breach.

The 9 to 12 month buffer beyond forecast completion (Feasly) is a minimum discipline. For complex projects, larger programs or markets where construction timelines have been volatile, a longer buffer is worth negotiating into contracts at the time of sale.

See our off-the-plan finance and settlement guide for more on how finance conditions at settlement interact with pre-sale contract terms.

Practical Sequencing for a Developer

In broad terms, the pre-sales and financing process for a residential development follows this order, though every project differs and this is a general description, not advice:

1. Design and planning approval: Before pre-sales can begin in most jurisdictions, a registered plan or development approval needs to be in place or imminent. Selling off-the-plan without a sufficient level of approval is constrained by state disclosure laws.

2. Pricing and presales strategy: A project marketer, independent valuer or sales advisor is engaged to recommend pricing, staging and release structure. This is typically when channel decisions are made. See project marketing vs channel sales vs buyers agent distribution for a cost comparison.

3. Pre-sales campaign: Contracts are exchanged, deposits held in trust, sunset dates set. The mix of owner-occupiers and investors, and the channel through which they are sourced, affects the qualifying composition of the register.

4. Finance application and credit assessment: The construction loan application is submitted with the pre-sales register, valuations, project costs, contractor details and planning approval. The lender's credit team assesses the qualifying pre-sale composition against their specific policy.

5. Facility approval and first drawdown: Once approved, the facility is activated and construction drawdowns begin, typically tied to milestones.

6. Completions and settlements: Pre-sold contracts settle as practical completion certificates are issued. Settlement funds repay the construction facility.

Each stage has its own legal, financial and regulatory dimensions. Engaging a development-experienced solicitor and a specialist construction finance broker early, rather than when you are already under time pressure, tends to reduce the number of problems that emerge mid-process.

Where Distribution Helps

Reaching enough qualifying, arm's length purchasers in the pre-sales window is a distribution problem as much as a pricing problem. A developer whose only channel is a single project marketing agency is relying on that agency's buyer register and their activated channel partners to deliver the volume and quality of pre-sales needed.

Distributing the project simultaneously to a national buyers agent network creates a parallel pipeline of purchasers who arrive pre-qualified, individually represented and structurally positioned to meet arm's length and non-related-party tests. It also widens geographic reach, particularly important for projects in markets where the local investor base is shallow.

See how to sell off-the-plan apartments through a buyers agent network for detail on how that process works in practice.

Finance Questions: Speak to Your Broker

Nothing in this article constitutes credit advice or a recommendation of any finance product or lender. Construction finance structures, credit policy, rates and pre-sale requirements change regularly. The figures cited here reflect data from early 2026 and should be treated as a general reference only.

AgentBridge's sister brand, LenderBridge, works with developers on finance-side questions and can connect you with brokers experienced in construction and development lending. For finance-related questions, a good starting point is lenderbridge.com.au.

Where AgentBridge Fits

Pre-sales are not just a finance-threshold exercise. They are evidence of genuine demand, at genuine prices, from genuine buyers. The composition of the register matters as much as the aggregate contracted value.

AgentBridge distributes your project to a national network of 80+ buyers agents simultaneously, rather than relying on a single agency list or a channel network where commissions are embedded in inflated prices. Each buyer that comes through the network has their own independent buyers agent, generating a clean arm's length transaction. Deposits are held properly; contracts are unconditional on buyer-side terms.

The distribution fee is transparent and sits roughly 30% to 40% below a traditional agent commission. Nothing is added to the sale price. Buyers are never charged by AgentBridge.

To discuss how distribution into the buyers agent network fits your pre-sales strategy, visit agentbridge.com.au/contact or review fee structure at agentbridge.com.au/fees.

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General information only, not financial, legal or taxation advice. Speak to your own solicitor, accountant and adviser before acting on anything here.