Westpac Stops Foreign Lending

Westpac Bank and all of their subsidiaries have become the latest lending institution to stop lending to foreign residential property buyers.

Westpac Bank also owns St.George, BankSA, Bank of Melbourne and RAMS.

This comes a week after the Commonwealth Bank reviewed their lending guidelines and 3 weeks after ANZ made their announcement to restrict their lending to foreign buyers. 

Some of the changes made by Westpac are;

  • Westpac Group will no longer accept applications from non-residents
  • Local applications that include foreign income will only be given a 70% lend

These new lending guidelines are effective as of April 26. For any mortgages that were previously approved, the old lending guidelines apply. For any loans that have been approved but have not had mortgage documents issued by the bank will be cancelled.

Earlier this month, ANZ were quite scathing regarding their concerns of fraudulent activity between applicants and mortgage brokers. ANZ requirements no include;

  • Insisting on untranslated original documentation
  • Tightened passport scrutiny
  • Applicants must show all pages of their passport
  • Applicants with 100% foreign income will not be accepted

This will be concerning to the property developers in multi staged developments that have relied heavily on foreign investors to achieve their pre-sale requirements.

The issues property developers may face in a year or two as they get closer to settlement is whether or not the foreign investors that exchanged on 10% will be able to raise the funds to settle the property.