Southbank Mortgage Broking and Debt Consolidation

Southbank is one of the most densely built residential areas in the country, and lender policy reflects it. Minimum internal floor areas, caps on how much a lender will advance in a high-density postcode, and building-specific restrictions all appear here more often than almost anywhere else in Melbourne.

The practical consequence is that two owners in the same tower can get very different answers depending on the size of the apartment and which lender they approach. It is worth establishing the internal area from your plan of subdivision before you do anything else, because it determines which lenders are realistic.

Owners are often surprised that the lender who wrote the original loan will not repeat it. In most cases that is not about you at all. Policy at many lenders tightened after a great deal of this stock was completed, and the relevant question now is which lenders are comfortable today with your building and your floor area.

Around the towers sits the arts precinct, the casino and convention business, restaurants, bars and a large events and services economy. That produces a distinctive set of small businesses: hospitality operators, event and production companies, contractors and suppliers, and a workforce with shift and casual income.

• Hospitality operators carrying fit-out finance and a personally guaranteed lease
• Event and production businesses with income concentrated into a handful of months
• GST collected and used as working capital, then a BAS lodged and not paid
• Short-term unsecured facilities taking daily debits from a thin trading account

For an operator in that position, the usable equity often sits in a home outside the postcode rather than in the business. Raising it early usually changes the options considerably.

Fit-out costs in this precinct are high and lease terms are usually long, which means a business can be paying for a previous decision for years after the trading conditions that justified it have changed. That is worth naming honestly when a consolidation is being considered.

Southbank has a high proportion of investor-owned stock alongside genuine owner-occupiers. That matters because lenders assess the two differently, and because a building with a very high investor concentration attracts closer attention from some lenders again. Rental income, owners corporation fees, sinking fund positions and any short-stay letting arrangements all feed into the assessment.

None of this is a reason to avoid the postcode. It is a reason to have the details ready and to approach the right lender first.

Owners corporation records matter here as much as the apartment itself. Sinking fund positions, special levies, defect rectification history and any litigation all feed into a lender's assessment, and producing the certificate at the start of a file rather than partway through saves real time.