Land bank finance Australia: funding a site before you've got a DA
Land bank finance is private, non-bank finance secured against undeveloped or pre-DA land, used to buy or hold a site while approvals, rezoning or consolidation run in the background. Aurelius Private are private lending brokers. We arrange land-bank facilities across a panel of 131+ private lenders for developers holding sites the banks won't touch before a DA is issued.
Why banks won't write land without a DA
A bank credit committee wants two things a raw site can't offer: an income-producing asset and a clear serviceability trend. Vacant or pre-DA land produces neither. There's no rental income, no completed project to value on an "as if complete" basis, and no presales to demonstrate demand. Add in the time a DA actually takes and the picture gets worse. Property Council of Australia research on New South Wales councils found DA processing times ranging from around 70 days at the most efficient councils to well over 200 days at the slowest, with Georges River Council averaging 289 days against a 40-day statutory target.[2][3] Few bank facilities are built to sit still that long with no exit event in sight.
Private credit exists precisely for that gap. A lender on Aurelius Private's panel prices the land itself: location, zoning trajectory, comparable sales, and how realistic the rezoning or subdivision path actually is, not a bank-standard serviceability test.
How a land bank facility is structured
Land bank deals share a common shape, even though every site is different:
- Loan size:$500K to $50M+, matched to land value and the developer's acquisition or refinance need.
- LVR:typically 50–65% of land value, lower than a developed-security LVR because the asset generates no income while it's held.
- Term: 12 to 24 months, occasionally extended to 36 months for multi-stage rezoning applications.
- Security: first mortgage over the land, sometimes with a second mortgage or caveat layered in where the developer needs to release additional equity.
- Repayment:interest is usually capitalised into the facility rather than serviced monthly, since the site isn't generating cashflow.
Pricing sits above standard bridging or first-mortgage bank rates because the lender is taking single-asset land risk with no rental income and no completed-project comparable. With the RBA cash rate target holding at 4.35% through mid-2026,[1] private credit for pre-DA land typically prices well above that base rate. The trade: a lender willing to write against land the banks have already passed on, on a timeframe that suits the approvals process rather than a bank's credit cycle.
What lenders actually assess
A land bank deal lives or dies on the exit, not the entry. Before a facility is placed, the lender wants to see:
Zoning trajectory. Is the site already zoned for the intended use, or is rezoning the whole thesis? A lender needs a credible planning pathway, not a hope.
Holding cost coverage.Rates, land tax and interest all accrue while the site sits vacant. Lenders want to see how the developer covers these costs across the term. Capitalised interest reduces the monthly burden, but doesn't remove the cost.
A defined exit. Refinance into construction finance once the DA lands, sale of a consolidated parcel, or an on-sale to a builder taking the site to the next stage. "We'll work it out" isn't an exit a private lender will price against.
Site quality over paperwork.Because there's no completed DA or presales register to assess, the underwriting leans harder on comparable sales, valuer commentary on rezoning likelihood, and the developer's track record on similar sites.
Land bank finance vs bridging vs development finance
The three products get confused because they all sit in the pre-construction space, but they solve different problems:
| Land bank | Bridging finance | Development finance | |
|---|---|---|---|
| Stage | Pre-DA, no build planned yet | Between two known events (sale, refinance, settlement) | Post-DA, funding the build |
| Typical LVR | 50–65% of land value | To 75%, deal-dependent | To 70% of TDC, structure-dependent |
| Term | 12–24 months | Days to a few months | 12–24 months, drawn against costs |
| Repayment | Capitalised | Capitalised or serviced | Progressive drawdowns against QS certification |
A developer holding a site for two years while a rezoning application works through council needs land bank finance. A developer with an unconditional contract settling in three weeks and a sale six months out needs bridging finance. A developer with an approved DA and a QS report ready to go needs construction finance. See how construction finance works from land to lock-up for how that facility draws down against build cost once the DA is in hand.
Who actually uses land bank finance
Three borrower types come to us for land bank deals:
- Developers securing sites ahead of a rezoning window: buying now, before a growth corridor is formally rezoned, to lock in land at pre-uplift pricing.
- Site consolidators assembling two or more adjoining lots for a larger DA, where settlement timing across multiple contracts rarely lines up with bank approval timeframes.
- Builders and investors holding pipeline stock: land bought ahead of need, to keep a future construction pipeline supplied without racing the market for sites when they're ready to build.
How Aurelius Private structures the deal
Land bank deals get one application, then go to the panel lender whose appetite actually fits: a lender comfortable with the specific council, the specific zoning path, and the specific holding period the developer needs. Aurelius Private structures the facility, runs the valuation and title work, and places it with the right lender from our 131+ private lender panel. The loan agreement sits between the developer and that lender, not with Aurelius Private.
Every Aurelius Private deal is commercial-purpose only, outside the NCCP. Consumer or owner-occupier lending sits with our affiliated brokerage, Aurelius Capital.
Got a pre-DA site to fund?
Submit a scenariowith the site, the zoning position and the timeframe you're working to. Aurelius Private comes back with an indicative structure, lender path and pricing band before any formal application. See how it works for the process end to end.
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