08 Sep 2025

Thought leadership

Read time: 3 Min

19k

Why TOD Projects Need Support

By Mark Austin

Why TOD Projects Keep Failing

NSW's $50 billion transit-oriented development opportunity should be a goldmine for developers and investors.

But the industry faces unprecedented challenges that threaten to derail this opportunity.

After 25 years building financial technology across Australia, Asia and the US, I see a perfect storm: traditional banking complexity colliding with Australia's most severe construction industry crisis in decades.

This creates both risk and opportunity for CFOs, mortgage brokers, and real estate investors who understand what's really happening.

The Banking Silo Problem

Traditional lenders are built to understand single-use properties. A shopping centre. An office building. A residential complex.

TOD projects break this mould completely.

When you have a development that's part shopping centre, part office, part residential all in one project, each component needs independent valuation. The retail property team, commercial team, and residential team all need to sign off on different pieces of the same project.

Developers need certainty of funding. When they're dealing with four different parts of the same bank, everything slows down.

Time costs money in development. Serious money.

The Velocity Crisis

For developers, certainty means one thing: they can just get on with it and make sure it's built quickly to a high standard and get on with the next project.

But traditional banking creates the opposite outcome.

Slow financing means contractors and builders can't be locked in. Projects stall while developers navigate internal bank politics. Subcontractors move to other jobs. Costs escalate.

The financing bottleneck creates a domino effect that kills project economics before ground is even broken.

Australia's Construction Crisis Changes Everything

The financing complexity would be manageable in a healthy construction market.

We don't have a healthy construction market.

ASIC's latest insolvency data reveals construction accounted for 27% of total company failures nationally in 2023-24, with 2,975 construction companies entering insolvency. This represents a 36% year-on-year rise in company failures, with construction leading all industries affected.

This crisis stems from COVID-19 disruptions, supply chain pressures, and rising material costs that began in 2020. The industry is experiencing the most challenging period in decades, right when Australia faces a critical housing shortage.

The Australian Bureau of Statistics reports dwelling approvals fell 9.5% in December 2023, with NSW approvals down 19% in June 2024 to the lowest financial year levels since 2011-12.

The risk increases exponentially when lenders can't depend on builders to deliver projects. If the builder fails, lenders lose money straight away.

Traditional banks now face a complex equation: financing complexity multiplied by construction delivery uncertainty during a housing crisis.

Many are reassessing their appetite for TOD projects entirely.

Digital Platforms Solve Both Problems

The solution isn't fixing traditional banking. It's bypassing it completely.

Digital financing platforms can connect TOD developers with global financiers who understand mixed-use developments. No internal silos. No departmental sign-offs. No complexity bottlenecks.

Technology eliminates friction in complex transactions.

Global financiers often have better risk assessment frameworks for mixed-use projects than domestic banks stuck in single-use thinking.

Government Policy Creates Digital Opportunity

The NSW Government's official TOD Program targets 47,800 new homes across 39 transport hubs over 15 years, requiring councils to identify TOD precincts within 400 metres of metro stations and facilitate higher density development.

This creates predictable, government-backed development opportunities with regulatory certainty.

Digital platforms thrive on predictable deal flow with regulatory certainty. Traditional banks struggle with complexity. Digital platforms standardise it.

The same government policy that confuses traditional lenders creates systematic opportunities for technology-enabled financing.

The Construction Risk Solution

Digital platforms also solve the construction delivery problem through better data and global reach.

Global financiers can access construction companies and delivery partners that domestic banks can't reach. International expertise in mixed-use development. Proven track records in similar projects.

Technology enables due diligence on construction partners that traditional banks can't match. Risk assessment becomes data-driven rather than relationship-based.

For mortgage brokers, this creates a blue ocean opportunity. The complexity that scares traditional lenders becomes your competitive advantage when you understand how to structure these deals through digital platforms.

Speed Equals Certainty

Developers want to build, deliver, and move to the next opportunity.

Digital platforms deliver financing decisions in weeks, not months. Global capital allocation happens at digital speed with complete transparency.

No internal bank politics. No departmental delays. No financing uncertainty.

This speed advantage translates directly to improved project IRRs and reduced carrying costs during the approval process.

The Market Transformation

Sydney Metro expansion includes 46 new stations by 2030 across City & Southwest, Metro West, and Western Sydney Airport lines. Each station represents approximately 50 hectares of developable land with government policy requiring higher density mixed-use development.

Traditional banks will continue struggling with TOD complexity while digital platforms capture the systematic opportunity.

The convergence of government policy, construction industry restructuring, and digital financing creates unprecedented market transformation.

Developers who embrace digital financing will build faster, cheaper, and with greater certainty.

Those stuck with traditional banking will watch opportunities disappear.

The Investment Thesis

For real estate investors and lenders, the TOD opportunity is hiding in plain sight. Commercial properties within 400 metres of Sydney train stations achieve rental premiums of 12-18% compared to non-transit locations.

Sydney Metro Northwest delivered measurable results: average residential property values within 800 metres of new stations increased 15-20% above broader market growth between 2019-2023.

The Federal Government's $10 billion Housing Australia Future Fund targets 30,000 new social and affordable homes over five years, with annual disbursements of $500 million supporting TOD development around transport hubs.

The $50 billion TOD opportunity is real. The question is whether you'll access it through 20th century banking or 21st century digital platforms.

The choice determines whether your projects get built or get stalled.