Why CrowdProperty is doubling down on experienced developers
Back to Blog 9 October 2025 9 minute read
CrowdProperty is currently refining and evolving its business model, in response to shifts in the SME development sector that have coincided with major changes in the housing market.
Chief amongst the adjustments under implementation is a strategic shift by CrowdProperty towards the $5m – $15m residential project space. This segment of the market is dominated by more experienced developers, presenting less risk and more reliable returns from an investment perspective.
The move enables CrowdProperty to better empower some of Australia’s most capable SME developers, helping them overcome barriers to the creation of more homes.
A data-driven shift
CrowdProperty has been operating in the Australian market since May 2021, giving it the opportunity to amass data from more than $2.25 billion in loan applications over the past few years.
Following an in-depth analysis of this data to better understand the opportunities in the Australian housing market, CrowdProperty has concluded that a shift in focus towards the $5m – $15m loan size is now underway.
Brian Cullen, property director for CrowdProperty Australia, said a key advantage of this shift is that it enables CrowdProperty to focus on the underserved but more experienced and dedicated professional SME developers, who have ambitions to grow and develop their businesses.
These developers are more inclined to work on medium scale projects that make greater economic sense as investments, while at the same time posing far less risk from the perspective of lenders.
“In this space especially, when there is a lack of experience, it can make a big difference to the overall success of the project,” Cullen said.
“For us, we see the risks inside certain smaller projects and borrower types as being too great for the return that we can generate — there’s just not enough money.”
Lack of experience also means greater workloads and delays when it comes to the twists and turns of the project development journey, which can further compound risk and compromise the outcome of investments.
Cullen points out that the strength of Australia’s growing SME community means CrowdProperty is seeing a surge in development and bridging loan applications from experienced developers who can complete projects skillfully and provide potentially safer returns to investors.
This is reflected by the growing volume of applications from SME developers who have put in the hard yards to build their skills, and are now moving on to bigger projects that better suit market conditions.
“We are seeing a big uptick in borrower enquiries in the target range every month,” he said.
“Due to rising costs — and house values across NSW and Queensland in particular — the SME development transactions are naturally landing in this ticket size.
“The true SME developer with the appropriate amount of experience and capital is now investing in this space. Hence, our approach to provide a lower cost of capital and customised lending products to suit this market segment.”
Why $5m – $15m is the sweet spot
CrowdProperty has determined that $5m to $15m is just the spot for its debt financing. The segment strikes just the right balance between experience and ambition, while avoiding the needless complexity of larger projects.
Cullen notes that the bigger projects by their very nature pose risks when it comes to financing and development, because of the increased complexity that their size entails.
“The larger transactions of $20 million or more can involve a great deal of commercial construction — including in-ground construction,” Cullen said.
“Larger developments also add greater complexity to all aspects of the project, including the build phase, the selling phase and the preparation phase.
“For this reason we’re staying out of that more complex transaction type.”
Projects in the $5m – $15m range, however, still manage to attract experienced developers with institutional-levels of discipline that can mitigate risk for investors. They also tend to have proven track records of successfully completed projects.
These experienced developers are able to make sound decisions more quickly than novices, which reduces delays. They’re also less prone to making errors given their prior track record, as well as better equipped to deal with the inevitable challenges and mishaps that arise.
All of this makes the $5m – $15m project size ideal for debt financing by CrowdProperty when it comes to workload and delays, in addition to risk and levels of return.
“With projects of this size, it all balances out really well for us in terms of resources and how we raise investment,” Cullen said.
“It’s the right balance when it comes to the effort to raise the investment, the profitability of the transactions, and the management of that experienced client through all phases of the execution.”
Given the experience and knowledge base of the developers behind these projects, they are also the borrowers best-equipped to capitalise upon the expertise and advice that CrowdProperty has to offer, as a specialised marketplace lender.
A gap in the market
The continued failure of mainstream banks to adequately service SME development — even at the larger end of the scale — is another reason why CrowdProperty has now set its sights upon the $5m – $15m segment.
Changes in market composition attest to this ongoing failure by Australia’s established lenders, prompting non-bank lenders and private credit to step in and pick up the slack. Residential development now accounts for around 26 percent of real estate lending by private lenders, up from just 15 percent in 2019.
Cullen believes that this isn’t a case of just negligence on the part of Australia’s banking sector and larger financial institutions, but a deliberate policy of avoiding SME developers at the mid-range of the market.
“The banks themselves have made a conscious decision, strategically, to shift out of this space completely,” he said.
“The smaller size of one to two dwellings is where they are, because it’s very easy to understand. The risk profile is quite straightforward, even though they have a borrower that’s less experienced.
“How they source their capital is well-priced to move into that phase, and the end product is really simple and easy to sell back in the market if there’s ever any problems with the deal.”
Cullen points to the demands of Australia’s financial regulators as also playing a key role in driving the banks to pull back from the medium-scale projects of experienced SME developers.
“A whole heap of things tightened up as a result of the Royal Commission into the banking sector,” Cullen said. “The banks had to have more capital on their balance sheets to support certain types of lending.
“As a result, they pulled back from a whole range of lending that they had done in the past but wasn’t super complex.
“This was on the grounds that they needed to spread capital a further now into these other areas.”
Supporting bigger projects can help solve the housing crisis
Given the gap in funding from banks, greater financial support for housing projects in the $5m – $15m sweet spot could help Australia to solve the nationwide home affordability crisis.
The federal government has launched strenuous measures to overcome Australia’s critical shortfall in homes. In August 2023, the national cabinet set the target of building 1.2 million new well-located homes over a five-year period, starting from 1 July 2024.
SME developers must play a role in the creation of this supply, given that the cabinet’s mandate is for the construction of ‘well-located’ homes within reasonable proximity of jobs and amenities.
Such well-located dwellings will invariably consist of in-fill developments in established residential areas with pre-existing infrastructure and built environments. SME players are far better suited to such projects than large-scale developers, given their greater flexibility and adaptability.
Despite their importance for the Australian housing market, SME developers continue to face major challenges when it comes to getting their projects off the ground — especially on the financial access front.
CrowdProperty’s 2025 survey of 216 SME developers found they face a slew of constraints when it comes to financing. Over 50 percent of respondents said raising debt finance was one of the three biggest factors holding back their developments.
As a consequence, SME developers are even more dissatisfied with the financial services than ever. In 2025, they gave their financial providers a shocking NPS (Net Promoter Score) of -39, as a measure of the likelihood that they would recommend their last lender’s services to a friend or colleague.
To put the latest figure in context, a good NPS score is considered anything above 0, while a score above 50 is excellent and anything beyond 80 world class. The 2025 figure marks a further worsening of the negative NPS result of -19.67 that smaller developers gave to their financial service providers in 2023.
The survey also found that housing entrepreneurs were especially focused on timing, certainty, speed and lender support when it came to obtaining financial services for their developments.
As a specialised marketplace lender staffed by a team of industry experts, CrowdProperty is ideally equipped to help SME developers overcome their financing challenges, as well as cater to their unique service demands.
CrowdProperty’s shift towards the $5m – $15m bracket now puts it in an even better position to empower such developers to help Australia overcome its nationwide housing crisis, by giving them funding support for projects that can truly make a difference to urban in-fill home supply.
