Commonwealth Bank teams with Coposit to developers ‘Afterpay’ for unit buyers

Developers will be able to secure pre-sales with buyers initially stumping up just $10,000, in a new play by Commonwealth Bank and Coposit to help get more projects built.

Coposit is currently working with NPA Projects to sell the Yves tower on the Gold Coast. Picture: Supplied

Developers will be able to secure off-the-plan sales with buyers stumping up an initial as little as $10,000 under a new initiative by Commonwealth Bank to help build more units faster.

The collaboration with property tech platform Coposit allows for residential apartment and townhouse developers to secure up to 10 per cent of their required pre-sales within projects with the small down payment prior to securing funding for the project to be built.

The buyers will then enter a payment plan to build up their deposit to 10 per cent of the purchase price interest-free while the project is under development before entering a mortgage when they get the keys two to three years later.

The buy-now, pay-later arrangement offers banks, developers and buyers security at a time when the housing industry is struggling to build enough homes, says CBA group executive of business banking, Mike Vacy-Lyle.

“It enables buyers with a lower deposit to get a foothold on securing a property while then saving for that property over the period of the development phase, therefore securing the property at today’s prices tomorrow,” he said.

“We want to support our developers. The goal for us is the fast-tracking of the project to start and, linking that to supply issues more broadly, we want to make sure that developers can start in a quick time frame.”

Mr Vacy-Lyle said developers are typically required to achieve pre-sales of between 30 per cent and 50 per cent in order to qualify for a construction loan and begin building.

Coposit co-founder and chief executive Chris Ferris said the bank is insulated from risk because all buyers are pre-qualified for the purchase to ensure they will be comfortable buying when the project is completed.

“We look at what their borrowing capacity is, and we’re really checking two things: number one, can they afford and get through those weekly payments? Secondly, if they get that full 10 per cent deposit, what’s their settlement position?” Mr Ferris said.

“That is not currently in-market whatsoever at the moment in off-the-plan sales.

‘We believe in breaking the barriers to home ownership for all Australians and we are thrilled to see that Australia’s largest bank agrees.”

The Coposit platform is currently being to facilitate 65 projects across New South Wales, Queensland and the ACT. Mr Vacy-Lyle said this collaboration will take the platform nationally.

“The reality is the housing supply issue is multifaceted and there’s lots of different levers finances can pull,” he said.

“We want to get as much good capital out into the market.”

CBA has also recently updated its lending criteria for build-to-rent housing.

Building approvals in Australia have remained in the doldrums for over 12 months as labour shortages and builder constraints put pressure on project budgets.