Westpac severs foreign property buyer umbilical

Prepare for a Gotti and Highrise Harry conniption, from the AFR:

Westpac Bank and all banks in the Westpac group including St George Bank, Bank of Melbourne and BankSA have ceased lending to all foreign residential property buyers.

The bank joins ANZ and the Commonwealth Bank in the latest round of foreign lending tightening.

“In line with Westpac Group’s responsible lending practices, we have strengthened our policies regarding non-residents lending and foreign income, which represent a very small component of our loan book,” a Westpac spokesman said.

The Westpac Group will no longer accept mortgage applications from non-residents, home buyers with foreign self-employed income and those who hold temporary visas in Australia.

Local applications that include foreign income will be given a lower loan-to-value ratio of 70 per cent, down from 80 per cent.

Farewell!

Comments

    • flyingfoxMEMBER

      Nope, this is a bank call. Likely internal models etc are predicting a softening property market which means the banks can be left with negative equity if the mortgage holder decides to take a loss on the 5% deposit instead of being in potentially greater NE.

    • The fact that we do not know says it all.

      Considering the impact these decisions have on investment decisions and the property market, if APRA is involved they should be making public their directions in the same way as the RBA makes interest rate announcements.

      Perhaps Westpac are just trying to free up some more credit capacity for applications from the pre-school child care centres (yes yes I know babies cannot apply for a home loan)

      https://pfh007.com/2016/04/27/baby-watch-infant-landlord-class-pampered/

  1. Is NAB the only one left?

    What about the smaller lenders. e.g. Mac Bank? Borrowers would flood to them.

    • The Penske FileMEMBER

      I work for a second tier mortgage company and while at a seminar today I and others are being bombarded by deals. What these clients are about to find out is that no one wants their dog box crap. The Melbourne apartment market just went pop.

      • Today's Empire Tomorrow's Ashes

        Prithee,

        I and others are being bombarded by deals

        By whom, and for what?

      • Respect for your name. …

        Now …. what do you mean by bombarded by deals?

        Deals are two sided – no? Therefore someone wants them – no?

        Or do you mean something else when you say no one wants them?

    • The Penske FileMEMBER

      P. Mortgage brokers (Asian) acting for OS purchasers. Security is mostly high rise but I’ve seen two good North Shore ones as well.

      • Can you elaborate on what you mean by your comments? North shore? Are you referring to Sydney? Security? Are you referring to the properties that borrowers want to buy, or collateral they are offering?

        Sounds like an interesting story, but your comments are so brief I don’t understand it.

      • tripsterMEMBER

        Am also interested to hear more and don’t quite undersrand the intended meaning of the original comments

      • The Penske FileMEMBER

        Sorry for the late reply. Westpac’s pull out of this space will leave a void that can not be filled. I’ve been very diplomatic in all my conversations with brokers, aggregators and referrers over the past few days and although the last two real players in Citi and NAB haven’t changed their policy’s as at today it will only be for the short term. Basically all the loans that were in the pipe for Westpac are now trying to be flicked by brokers to the 2nd tier lenders. Typically 2nd tier lenders have warehouse facilities with Westpac or CBA so …. I hear from a very good source that 200 mortgage brokers in Sydney have been punted by their aggregators and Westpac this year due to fraud. When I’ve called some top operators in the industry to verify what I believe to be a figure way to high too believe I’ve received nothing but confirmation.
        Firstly the mortgage broker space is diverse and delivering over 50% of bank business. Secondly there’s always been a sub culture in this industry made up of the Asian brokers dealing with Chinese borrowers. They have never been interested in the business opportunities that I’ve had until now so good luck to them. My real issue is that ASIC, Westpac, ANZ or Broker Aggregators have found fraud have the police been informed?
        I took a call today from somebody acting for a developer looking to secure funding for OS borrowers on a Melbourne high rise settling next month looking for finance. Good luck!

  2. A hedge move in case of an ALP win and the subsequent RC into bank corruption and incompetence. !

  3. Ummm – what will happen to all their existing offshore loans? Will this book be sold to MacBank or will it be called?????

    • OJ, you still think this is on WBC’s balance sheet? I reckon it would have been sold off long ago to super and pension funds via MBS. With respect to anything on the non-performing side foreign borrowers will not be material I would’ve thought. Well for well run bank it wouldn’t have……

      • I would have thought the same, but would they not have to declare these in order to make them qualify for the RMBS market? I guess a mixed bag approach with these buried in the non-prime would also work…

      • That may not help them. Once a few of these RMBS go bad and the investors realise they have been had .WBC will find themselves the new owner of the toxic waste and investors put it back in their laps.

    • ANd if the book gets sold off, will WBC report at what price (I think they have to). That should give us a hint at where things stand.

  4. propertychat reckons wbc is good for 65% of foreign loans…

    correction

    across all entities

    game over

  5. TailorTrashMEMBER

    “the lender said its priority continues to be “to support Australian citizens and permanent residents living outside of Australia on their journey to own a home or investment property” in the country.”…………………and what fine upstanding organisations our banks are …..their concern for the well being of their fellow citazens and the building of the “fair go society” is truely to be admired ……………….Kinghthood in the order of Australia to all of their MDs please ……

    ……….or maybe the shit is about to hit the fan in apartment land followed by the crumbling piles in slumville, Sydney that they have valued at 1 million each ……….http://bloom.bg/1rgvKD6

    • I truly hope you are right.about the last paragraph.
      And you are definitely right about your first paragraph. They do care. lol

  6. It certainly will raise a few eyebrows. Not sure what it means yet myself, but happy to wait things out this year to see where things head next.

  7. Stop and think for a moment – what will happen to the wider economy and real estate market, including houses, if the apartment boom busts.

    Seriously – I don’t think people are considering this enough – there is a strong sentiment that even if it busts, housing will remain strong.

    An apartment bust will, in my view, wipe out the Victorian economy.

    Literally over a cliff.

    • IK
      So you expect the Apartment BOOM to continue forever, despite all the warnings in last 15 years?
      This false economy, speculative housing is killing your country.
      Investors and illegal chinese buyers are only buying thinking that house/apartment prices only go up.
      Sorry, but I can’t wait to see the whole housing market crashing

  8. So there is a way to know about illegal purchasers of existing homes
    From this list, you can easily check on which houses are existing and which ones aren’t.
    Then pass the info to ATO
    See Kelly O’Dwyer: this is how things are DONE!

  9. If you really, really want to know what is going to happen to dogboxes on the East Coast of Aussie, check out Dubai, Florida, Abu Dhabi, Spain or our own Gold Coast amongst many, many others. “If you build them the liquidators will eventually come”. This industry is a Godsent to the legal profession!

  10. Interesting…I’ve got an account through st george which is owned by westpac. Had the account for yrs and have never heard boo from them. Today I got a phone call asking if I’d be interested in refinancing a mortgage as they have a new deal. Except that I don’t have a mortgage which the girl soon realised…they must be scraping the bottom of the barrel for contacts…

  11. C’mon people, this isn’t going to make much difference and Westpac knows it; they’re just playing PR and you’re falling for it.

    “Motivated” foreigners will keep buying and borrowing, increasing their use of the 100% local proxies that are already being used.

    When the credit spice stops flowing then it’s because of what’s happening on the other end of the pipe in China, not because of what’s happening here.

    • Agree. Australians are so terribly naïve…. They think the rest of the world plays by the rules, when even our PM is hoarding money in the Bahamas or wherever………

      Houses will most definitely be bought by proxy setups by OS investors…….

      Local crack downs are nothing more than pageantry with as much substance as the PM’s speeches…..

  12. this is not good for the property market.. espcially those off the plan developments…. after westpac, the other banks will follow suit.. and literally kill the foreign investment.