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.