What residual stock sells for, and how developers fund it

Completed but unsold apartments in Australia sell for 5 to 25% below the same project's off-the-plan prices: about 5% off with an incentive on individual sales, 10 to 20% on a priced-to-clear campaign, and 15 to 25% below summed unit values sold in one line. Melbourne's unsold stock trades at $8,000 to $10,000 per m2 against $12,500 to $15,000 new.

Residual stock is the tail of a development: the apartments, townhouses or titled lots still unsold when the builder hands over and the construction lender wants its money back. What that stock sells for depends almost entirely on how much time the developer has. Sold one at a time to owner occupiers it fetches close to full price. Sold in a hurry, or in one line to an investor, it goes for 15 to 25% less. This guide sets out the discount bands reported in 2025 and 2026, what a unit costs to hold each month, the published LVR and rate bands on residual stock loans, and a worked example of a facility that repays the construction lender and buys the time to sell at full price.

What unsold completed apartments actually sell for

There is no single residual stock price. There are three sale routes, and each carries a different discount to the price the project achieved off the plan.

The Melbourne numbers show why the discount exists. Charter Keck Cramer counted 8,000 completed apartments across metropolitan Melbourne that developers could not sell, 17% of everything completed between 2020 and 2024, out of roughly 45,000 units built. The unsold stock sits in the CBD (1,622 units), Southbank (676), Footscray (597) and Box Hill (504). That stock trades at about $8,000 to $10,000 per square metre, while a project launching in 2025 or 2026 needs $12,500 to $15,000 per square metre to cover a build cost that rose 78% in a decade. A 60 m2 apartment that sold for $600,000 in 2019 has to sell for about $780,000 today. Richard Temlett of Charter Keck Cramer put it plainly: developers cannot launch while competing stock sits at a 50% discount, when in a balanced market new stock would carry only a 10 to 15% premium over existing.

Urbis' Apartment Essentials survey puts the average price of new apartments at $17,165 per square metre in the first quarter of 2026, and sales as a share of available stock at 12 to 15% a quarter through 2025. At that absorption rate a project that completes with 20% unsold does not clear in a month; it clears over two to four quarters, and every one of those quarters costs money.

The in-one-line route is real but thin. Domain reported in March 2026 that Sydney investors are chasing whole blocks because developers no longer build small blocks that can be bought in one line, so a completed six to twelve unit project with clean titles gets investor interest. The price is the summed individual value less 15 to 25%, and the buyer usually wants a further allowance for vacancy and letting costs.

How long stock sits and what it costs to hold each month

Holding cost is the reason residual stock gets discounted. The construction facility was priced and sized for a build, not a sales campaign, and most run out of runway 60 to 120 days after practical completion. Past maturity the lender charges extension fees and then default interest. The table below builds the monthly cost of holding one completed Brisbane apartment from published inputs.

Add the selling cost on the way out: agent commission sits near 2.65% nationally in 2026, so about $19,900 on a $750,000 unit, and the 5% developer incentive that has become standard on slow projects is another $37,500. Six months of holding plus commission plus incentive is roughly $85,000 to $90,000 on a $750,000 apartment, or about 12% of the price. That is the point where a 15 to 20% in-one-line discount stops looking expensive, and it is exactly the sum a residual stock facility is meant to beat.

Sydney and Melbourne levies run higher. Savings Mate's 2026 figures for a standard two bedroom apartment are $1,500 to $3,000 a quarter in Sydney, $1,200 to $2,500 in Melbourne, $800 to $1,800 in Perth and $700 to $1,500 in Adelaide, with lifts, pools and concierge pushing luxury buildings past $5,000 a quarter. On a $1.2 million Sydney unit at the same 65% LVR the interest line alone is about $6,175 a month.

How residual stock loans work: LVR, pricing and release

A residual stock loan, also called development exit finance or completed stock finance, is a facility secured by the unsold units after practical completion and title registration. It repays the construction lender in full, capitalises its own interest, and is discharged unit by unit as sales settle. Because the security is finished and titled, it is priced below construction debt and well below a caveat or second mortgage bridge.

Two published product sheets anchor the non-bank band. La Trobe Financial's residual stock commercial loan is from 8.24% p.a., interest only for up to five years, loans of $100,000 to $50 million, with a 1.50% application fee and a maximum LVR of 75% inclusive of the interest budget, stepping down to 70% for facilities to $25 million and 65% to $50 million. Simple Property Loans' May 2026 product card is 8.24% p.a. at 60% LVR and 8.99% p.a. at 70%, up to $6 million per project and five units, a 1.50% plus GST establishment fee, a $500 application fee, a $5,000 commitment fee at letter of offer, interest serviced monthly or prepaid from the advance, and no break fees. Both lend to companies and trusts, not individuals, which is the tell that this is business-purpose lending.

How the LVR is struck matters as much as the number. Lenders take the lower of two tests: around 70% of the summed individual unit valuations, or 80% of the in-one-line valuation. Since the in-one-line figure already sits 15 to 25% under the sum of individual values, the second test usually binds on projects with more than a handful of units, and the effective LVR against retail value lands nearer 55 to 65%. Where some units are leased rather than vacant, the lender also wants rent to cover interest at about 1.2 to 1.5 times.

Release pricing is the mechanism that keeps the developer honest. Each unit is allocated a share of the debt, and on settlement the lender takes the higher of that allocation or 100% of net sale proceeds. Most non-bank and private lenders set the release price above the allocation, typically 105 to 120% of allocated debt, so the facility de-levers faster than it sells down and the last units are close to unencumbered. Interest is capitalised for vacant stock, so there is no monthly cash drain, and directors' guarantees are almost always full recourse. Lenders stress the sales program at two settlements a month base case and one a month downside, and size the interest budget to the downside.

Worked example: five unsold townhouses in Melbourne

The example below follows Innovate Funding's 2026 guide and is indicative, not an offer. Nine townhouses, $7.8 million gross realisation. Four settle at practical completion and $3.4 million goes back to the construction lender. Five remain unsold, with a summed retail value of $4.4 million and an in-one-line valuation of $3.9 million. The construction facility still owes $2.6 million and matures in 90 days.

Compare that with the two alternatives. Selling the five in one line at $3.9 million clears the $2.6 million construction debt and leaves about $1.3 million before commission, but gives away $500,000 against retail. Discounting each unit 10% to $792,000 to move them in 60 days brings in $3.96 million, about $1.26 million after a 2.65% commission and the construction payout, and still lands after the facility matures. The residual stock route, selling all five at $880,000 over the full year, brings in $4.4 million, and after $117,000 of commission, the $2.6 million payout, the $54,600 fee and $310,000 of interest the developer keeps about $1.32 million. On a twelve month sell-down the three routes finish within $80,000 of each other, which is the honest answer: the facility is buying time, not margin. Sell in six months and the interest bill halves, lifting the residual stock result to about $1.47 million, roughly $170,000 ahead of the in-one-line sale and $210,000 ahead of the discount route. The facility only wins if the stock actually sells at full price inside the term.

The same logic scales up. Feasly's 50-unit Sydney example carries a $45 million gross realisation, a $31.8 million construction balance at completion, and a $17.55 million residual stock facility at 10% p.a. capitalised over the unsold units, the difference being covered by settlements on the day. The bigger the project, the more likely the in-one-line test binds and the more equity the sponsor needs to leave in.

How developers fund residual stock

Senior construction debt, bank at 60 to 65% of cost, non-bank 65 to 75%, private up to 80%, has to be repaid within its runway, and presale settlements only cover part of it when 15 to 30% of the project is unsold. A residual stock facility from a non-bank or private lender at 65 to 75% of as-is value, priced from about 8.24% p.a. with interest capitalised, repays the construction lender in full and, where the LVR allows, releases equity into the next site. Banks refinance completed stock at 55 to 65% where some units are leased, at a lower rate on a longer timetable, which is where commercial property finance and business refinance sit. Where the shortfall is small and sales are weeks away, a caveat or second mortgage bridge can cover it; see caveat loans explained for the pricing. Equity release off a bank valuation of other property the developer holds is covered under property finance, and the build stage itself under construction finance. Private and non-bank residual stock lending is typically business purpose and not consumer regulated; every facility is subject to lender assessment and the rates above are indicative ranges, not offers. To get a number from Ventas, send the address and title status, the construction lender's payout figure and maturity date, a schedule of unsold units with asking prices and any contracts on foot, the latest valuation, and whether any units are leased. See development finance for how Ventas structures the whole stack.

This is general information only and not financial, credit, or tax advice. Figures are indicative market data from the sources listed, not Ventas offers, and move with the market. Consider your own circumstances and speak to a professional. All finance is subject to lender assessment and approval.

This article is general information only and not financial, credit, or tax advice. Ventas Asset Lending is a finance broker, not a lender. Approvals are subject to lender assessment. Consider your own circumstances and speak to a qualified professional, including your accountant for any tax questions.