NAB the final big 4 bank blocking foreign property investors
Article by Kelly Emmerton
All of the big 4 banks in Australia have now restricted lending to foreign property buyers, as NAB announced it has joined CommBank, ANZ and Westpac in curbing the amount of money lent to foreign investors with no income source in Australia, reports the Australian Financial Review.
The other three big banks changed their lending rules over the last two months. ANZ refused a number of home loan applications with entirely foreign income in April, citing “sloppy applications with missing passport pages, salaries being paid by obscure offshore companies and crudely translated supporting loan documents.”
The Commonwealth Bank followed with restrictions on foreign home loan applications and lending soon after, and Westpac announced an end to its foreign lending in late April.
At that time, NAB continued to lend to foreign house hunters on a case-by-case basis, with a strict LVR of 60%.
However, the major lender announced recently that under new policy changes, it would only be considering home loan applications from foreign buyers who had an existing source of Australian income.
"NAB continually reviews its policies to ensure we continue to lend responsibly, and respond to changing market conditions and regulatory requirements," a spokeswoman from the bank said.
"We recently made changes to our policy for lending to foreign applicants, which came into effect on Saturday 18 June."
The measures to curb lending to overseas investors seem to have worked, with interest from smaller foreign property buyers decreasing.
However, mortgage broker N1 Loans chief executive Ren Wong was quoted by the AFR as saying that the restrictions wouldn’t diminish foreign investment. He said there were other avenues for foreign investors to take, including settling in cash and speaking to overseas banks about taking out a home loan.
NAB added that conditions for local borrowers would not be affected, and that the same borrowing requirements would still apply to Australian and New Zealand citizens, as well as permanent residents living overseas applying for home loans with NAB.
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