Housing supply in Australia : the impact of the availability of development finance

Before the Global Financial Crisis many providers of finance had growth mandates and actively pursued development finance deals as a way of gaining higher returns on funds with regular capital turnover and re-investment possible. This was able to be achieved through high gearing and low presales in a strong market. As asset prices fell, loan covenants breached and memories of the 1990’s returned, banks rapidly adjusted their risk appetite via retraction of gearing and expansion of presale requirements. Early signs of loosening in bank credit policy are emerging, however parties seeking development finance are faced with a severely reduced number of institutions from which to source funding. The few institutions that are lending are filtering out only the best credit risks by way of constrictive credit conditions including: low loan to value ratios, the corresponding requirement to contribute high levels of equity, lack of support in non-prime locations and the requirement for only borrowers with well established track records. In this risk averse and capital constrained environment, the ability of developers to proceed with real estate developments is still being constrained by their inability to obtain project finance. This paper will examine the pre and post GFC development finance environment. It will identify the key lending criteria relevant to real estate development finance and will detail the related changes to credit policies over this period. The associated impact to real estate development projects will be presented, highlighting the significant constraint to supply that the inability to obtain finance poses.

Palaeoecology of the Mount Etna bat fauna, coastal Eastern Queensland

Global warming is already threatening many animal and plant communities worldwide, however, the effect of climate change on bat populations is poorly known. Understanding the factors influencing the survival of bats is crucial to their conservation, and this cannot be achieved solely by modern ecological studies. Palaeoecological investigations provide a perspective over a much longer temporal scale, allowing the understanding of the dynamic patterns that shaped the distribution of modern taxa. In this study twelve microchiropteran fossil assemblages from Mount Etna, central-eastern Queensland, ranging in age from more than 500,000 years to the present day, were investigated. The aim was to assess the responses of insectivorous bats to Quaternary environmental changes, including climatic fluctuations and recent anthropogenic impacts. In particular, this investigation focussed on the effects of increasing late Pleistocene aridity, the subsequent retraction of rainforest habitat, and the impact of cave mining following European settlement at Mount Etna. A thorough examination of the dental morphology of all available extant Australian bat taxa was conducted in order to identify the fossil taxa prior to their analysis in term of species richness and composition. This detailed odontological work provided new diagnostic dental characters for eighteen species and one genus. It also provided additional useful dental characters for three species and seven genera. This odontological analysis allowed the identification of fifteen fossil bat taxa from the Mount Etna deposits, all being representatives of extant bats, and included ten taxa identified to the species level (i.e., Macroderma gigas, Hipposideros semoni, Rhinolophus megaphyllus, Miniopterus schreibersii, Miniopterus australis, Scoteanax rueppellii, Chalinolobus gouldii, Chalinolobus dwyeri, Chalinolobus nigrogriseus and Vespadelus troughtoni) and five taxa identified to the generic level (i.e., Mormopterus, Taphozous, Nyctophilus, Scotorepens and Vespadelus). Palaeoecological analysis of the fossil taxa revealed that, unlike the non-volant mammal taxa, bats have remained essentially stable in terms of species diversity and community membership between the mid-Pleistocene rainforest habitat and the mesic habitat that occurs today in the region. The single major exception is Hipposideros semoni, which went locally extinct at Mount Etna. Additionally, while intensive mining operations resulted in the abandonment of at least one cave that served as a maternity roost in the recent past, the diversity of the Mount Etna bat fauna has not declined since European colonisation. The overall resilience through time of the bat species discussed herein is perhaps due to their unique ecological, behavioural, and physiological characteristics as well as their ability to fly, which have allowed them to successfully adapt to their changing environment. This study highlights the importance of palaeoecological analyses as a tool to gain an understanding of how bats have responded to environmental change in the past and provides valuable information for the conservation of threatened modern species, such as H. semoni.

An assessment of development funding for new housing post GFC in Queensland, Australia

Purpose: The purpose of this paper is to identify changes in bank lending criteria due to the GFC and to explore the associated impacts on new housing supply in Queensland, Australia. Design/methodology/approach: This research involves a survey of each of Australia’s big four banks, as well as two prominent arrangers of development finance. Data on key lending criteria was collected: Pre GFC, during the GFC, and GFC recovery stage. Findings: The GFC has resulted in a retraction of funds available for residential development. The few institutions lending are filtering out only the best credit risks by way of constrictive loan covenants including: low loan to value ratios, high cash equity requirements, regional “no go” zones, and demonstrated borrower track record. The ability of developers to proceed with new housing developments is being constrained by their inability to obtain sufficient finance. Research limitations/implications: This research uses survey data, together with an understanding of the project finance process to extrapolate impacts on the residential development industry across Queensland. No regional or sub-market analysis is included. Future research will include subsequent surveys to track any loosening of credit policies over time and sub-market sector analysis. Practical implications: The inability to obtain project finance is identified as a key constraint to new housing supply. This research will inform policy makers and provide important quantitative evidence of the importance of availability of development finance in the housing supply chain. Social implications: Queensland is facing a supply shortfall, which if not corrected, may lead to upward pressure on house prices and falling housing affordability. Originality/value: There is very little academic research on development funding. This research is unique in linking bank lending criteria to new housing supply and demonstrating the impact on the development industry.