In a first for a major Australian bank, the Commonwealth Bank of Australia’s (CBA) Business Bank has agreed to accept pre-sale contracts (up to 10 per cent) secured through property tech platform, Coposit, in residential development projects funded by the bank.

Traditionally, property developers have required that 10 per cent of the purchase price is paid upfront at the time of signing an off-the-plan contract for a new apartment or townhouse. Achieving a certain level of off-the-plan sales is also normally required before a lender, such as a bank, would be prepared to advance the construction loan for the development to proceed. For home buyers, these requirements meant needing to come up with thousands of dollars two to three years before getting keys to their new home.  

Coposit lets qualified home buyers purchase off-the-plan properties with a minimum deposit of $10,000. Prior to settlement the buyer pays the balance of the required deposit in weekly, interest-free payments during the construction phase and then finalises settlement through traditional financing channels upon completion. The innovative service allows buyers to secure a property purchase while continuing to accumulate savings until the project is complete and ready to move-in.

CBA Group Executive Business Banking Mike Vacy-Lyle said working with Coposit forms part of CBA’s ongoing commitment to support the construction sector and back innovative solutions aimed at tackling Australia’s housing shortage.

“Housing affordability and undersupply are some of the most pressing issues nationally, requiring a multifaceted approach involving innovative, sustainable solutions and cooperation between all industry stakeholders. Initiatives like this could make a real difference, particularly for first home buyers, by allowing them to secure the purchase of their first home while continuing to save for the initial deposit until the property is built,” Mr Vacy-Lyle said.

“By accepting Coposit contracts CBA is delivering greater certainty for property developers, who can include these sales in their pre-sale hurdles when seeking financing of their property projects. This is an important step in facilitating better lending outcomes for new residential developments, to help fast-track new supply to the market.”

Render of a completed building

Coposit’s CEO and Co-Founder Chris Ferris said: “In an environment where house prices continue to increase, it has become even harder for buyers to accumulate the savings required for an initial deposit. Coposit is changing the pathway to owning property – we believe in breaking the barriers to home ownership for all Australians and we are thrilled to see that Australia’s largest bank agrees. Coposit’s agreement with CBA will help more developers secure the pre-sales needed to get their projects underway and start their builds sooner, which is critical in helping the industry increase supply.”

Coposit has onboarded 65 projects on its platform across the eastern seaboard in New South Wales, Queensland, and the Australian Capital Territory.

In addition to accepting Coposit pre-sales, CBA’s Business Bank recently updated its lending criteria for built-to-rent housing.

“With residential vacancy rates at record low levels across the country, our new lending standards will support more rental housing developments, including the construction of social and affordable housing where we look to support Community Housing Providers,” Mr Vacy-Lyle said.

The Coposit initiative from the Business Bank builds on other programs of work CBA is undertaking in a bid to help Australians realise their property ownership ambitions. CBA also has a raft of other initiatives designed to help home buyers take a step onto the property ladder, including Property Share. Through CBA's Property Share product customers can split the cost of buying a house with friends or family while keeping their finances, ownership and repayments separate.

Go to CBA Newsroom for the latest news and announcements from Commonwealth Bank.

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