Gross realisation value (GRV)
Gross realisation value is the total expected sale proceeds of a development, including GST, as assessed by a valuer; development lenders size their loans as a percentage of it and of total development cost.
Gross realisation value, explained.
A GRV loan is set against the end value rather than the cost, which suits projects where the land is held at a low cost base or the margin is strong. Lenders commonly cap the loan at a percentage of GRV and at a percentage of total development cost, and the lower of the two applies.
Presales reduce the lender's reliance on the GRV assumption. The number of presales required, and whether they must be to unrelated parties at a minimum price, is a lender condition and a major driver of the funding terms.
Longer reads from the archive.
When the reading raises a question, ask it.
A finance review starts with a conversation and a written position from Dayan Kasturiratna, who provides the credit assistance on every file. No credit check to start.
The Learn section is general information about lending in Australia. It does not take account of your objectives, financial situation or needs, is not credit assistance, and is not tax, legal or financial advice. Lender policies, government schedules and regulations change; check the current position with the relevant body or with us before relying on it.
