Major Australian banking institution Westpac has joined fellow members of “the big four” ANZ and Commonwealth bank in announcing that it will no longer issue loans to foreigner nationals who have the intent to use borrowed funds to purchase residential property within Australia.
As of last week the bank and its subsidiaries – Bank of Melbourne, Bank SA and St George – have stopped lending funds to non-residents and temporary visa holders for the purpose of home buying intentions.
Australian and New Zealand nationals whose main source of income is derived from overseas interests will also be affected by Westpac’s new changes, and their lending conditions will now be restricted to loans for new housing builds only and with a maximum amount of 70% of the total purchase price being now made available – down from the previous amount of 80% available.
Westpac made note of the new lending conditions to foreigners and those deriving income from overseas in an email that was sent to local mortgage brokers, sighting national interest amongst the reasons that non-citizens and non-residents will no longer be able to borrow in order to purchase residential property within Australia.
With large amounts of money currently entering the Australian property market courtesy of foreign nationals there is a concern that the major banks new held position on purchases from overseas residents may have a flow on effect to new home and apart builds across the county.
Speaking on this latest development Ms. Siobhan Hayden, Mortgage and Finance Association of Australia, stated that Westpac’s new policy change reflects a decision by the bank to operate with a more balanced portfolio at this present time and with a reduced exposure to bad debts in its lending sector.