Westpac has announced a ban on lending to foreign investors looking to purchase Australian residential real estate.
The bank today announced that it and its subsidiaries St George, Bank SA and Bank of Melbourne will stop providing finance to non-residents and temporary visa holders looking to make residential purchases in Australia.
A small segment of Australian citizens and permanent visa holders will also be affected, with the bank announcing that loan-to-value ratios for those using foreign income to support a mortgage application will be capped at 70%.
A Westpac spokesperson said the decision was a prudent one for the bank to make.
“In line with Westpac Group’s responsible lending practices, we have strengthened our policies regarding non-resident lending and foreign income, which represents a very small component of our loan book,” the spokesperson said.
The decision follows recent moves by major lenders Commonwealth Bank and ANZ to tighten the lending criteria it uses for foreign buyers.
The Victorian government has also cracked down on foreign buyers, last week announcing it will hit them with higher stamp duty and land tax charges from 1 July
According to the latest figures from the Foreign Investment Review Board (FIRB)
, foreign investors purchased $96.9bn worth of Australian real estate over the 2014-15 financial year, including $60.75bn worth of residential stock.
Do you have more than $120k in your super fund? You could use your super to buy property - Find out how
Top Suburbs :
Get help financing your investment
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.
We value your privacy and treat all your information seriously - you can check out