Banks gaining on private credit firms in construction lending

A recent survey by Stamford Capital found major banks are returning to construction lending compared to 2023 when most banks chose to sit on the sidelines.

Throughout March and April 2026, the advisory firm conducted an online survey of 110 lenders including major banks, non-banks, second-tier banks and private lenders around Australia.

Almost 62% of respondents expect major banks to increase construction lending activity, up from 46% in 2025 and a dramatic recovery from just 13% back in 2023.

The survey found non-bank expectations, meanwhile, to have moderated. Over 65% expect non-banks to increase construction lending, down from 73% in 2025 and 52.7% for investment lending, down from 65%.

"While non-banks remain the dominant force in construction, the gap between bank and non-bank expectations has certainly narrowed," the report read.

Stamford Capital managing director Peter O'Connor said while banks and non-bank lenders both serve distinct markets, there could be emerging signs of more crossovers.

"Last year banks were back in play and they're keen to regain some of their market share. Is this signalling a rebalance? Not necessarily. Both lender types have historically served different needs for borrowers," O'Connor said.

"A lot of our clients need the additional leverage banks simply can't lend. They have been two distinct markets, albeit with major bank expectations, there could be emerging signs of more crossover coming."

This is happening as ASIC tightens its scrutiny on private credit funds.

Thirty five percent of non-bank and private lenders said they've already been approached or audited by ASIC, and a third said their due diligence approach has already changed in response, with a further 5% planning changes within 12 months.

While 43% of respondents remain moderately concerned about current practices and market size of the private credit market, those who are 'not concerned at all' have nearly halved to just 14%.

"From what we've heard in market, ASIC is concerned around lenders making thorough and appropriate disclosures to investors around risk. It's less about trying to curb this type of lending and more as to whether investors fully understand it. We haven't seen any effect to lending parameters as yet," O'Connor said.