CBA provides Australia's first build-to-rent green loan as land prices soar

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on October 27, 2021
CBA provides Australia's first build-to-rent green loan as land prices soar

'Indi Sydney City' will be the first residential project nationwide to utilise a $130 million green loan offered by the Commonwealth Bank.

The partnership between Commonwealth Bank and Oxford Properties Group (Oxford) will contribute to the construction of one of Australia’s most sustainable high-rise residential buildings.

Delivered and managed by Indi, the development is set to be a 5 Star Green Star building, carbon neutral in operations.

Indi Sydney City will also be the first to achieve a NABERS energy rating for build-to-rent developments.

To qualify for the green loan, Investa - owner of Oxford and Indi - collaborated on a Green Financing Framework with borrowings transparently earmarked for eligible green assets. 

The framework was developed in line with Green Loan Principles which is accepted as a primary guideline for issuing green loans globally.

Indi Sydney City adopts sustainability outcomes throughout design, construction and operation through material choices, onsite renewable generation and rainwater reuse.

Group Executive of Institutional Banking & Markets at Commonwealth Bank, Andrew Hinchliff, said supporting the development of green infrastructure required for the economy of tomorrow was a strategic priority for the bank.

"The way Australians live, work and play is changing and people will be seeking new, more flexible modes of living that can put them closer to their jobs," Mr Hinchcliff said.

"Build-to-rent properties will play a key part in Australia’s future."

Staggering land prices leave Aussies pondering next move

The Housing Industry Association (HIA) reported the cost of blocks of land has risen twice as fast as building materials.

HIA Chief Economist, Tim Reardon, said while building costs have contributed to 4% of the total cost of home building in the past financial year, land prices added 8.5%. 

"Land supply has been in tight supply for the past two decades and the surge in demand in 2020 has seen land prices in Sydney rise 27.1% in the past year alone," Mr Reardon said.

The strength of demand for land is set to continue throughout 2022 and into 2023 according to Mr Reardon.

"As land is a key component of housing, this increase in price has been a key driver of the rising cost of homes and the decline in housing affordability," he said.

CoreLogic's research director Tim Lawless said HomeBuilder brought forward demand, with land sales surging through the back half of 2020.

"The lift in land prices and residential construction costs along with the value of establish housing rising rapidly, is set to add further pressure to housing affordability challenges that are becoming increasingly apparent," Mr Lawless said.


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            The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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            Jacob Cocciolone joined the Savings team in 2021 as a Finance Journalist. Driven by a passion for keeping Australians up to date with the latest financial news and trends, his areas of interest include financial technology, investing, property and motoring.

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