Apartment lender AMP ‘blacklists’ more than 140 suburbs

Apartment lender 'blacklists' 140 suburbs

Interesting!

 

Mediocre minds:
AMP Apartment Black List Suburbs FYI

 

Bahaha snap!!!

 

link work not , think me

cliff

 

When all the Chicken Littles predicted the sky to fall after the APRA changes one of the expected changes I predicted was this approach. Lenders do it when they feel a market is overheated or a oversupply is expected. Some suburbs get special (lowball = firesale) valuations and some are just no lend areas where there is a concern values may fall. Often its just a lower LVR. Interesting ANZ has 50 post codes on a no-LMI list.

I would expect most lenders will take some sort of conservative approach especially in areas where over supply can be expected to come on line. They may take some time to confirm their individual approach but its often kept confidential (for a time)

Apartment lender 'blacklists' 140 suburbs

 

Interesting to see no ACT suburbs on that list.

 

Our IT department is working on it atm.

 

AMP probably blacklisted domain.com.au as well

here someone screen shot it prior
AMP Apartment Black List Suburbs FYI

 

Bahaha. Nah we've had some teething problems today, nothing major. Hopefully will all be sorted soon.

 

A prudent move IMHO to stop overexposure into high supply, limited demand areas. Just as most prudent investors have avoided these properties with a 10 foot pole, so to are the lenders.

 

Nice to see Teneriffe doesn't come up on the list

Cliff

 

New link. Apartment lender 'blacklists' 140 suburbs

 

That list isn't exactly noteworthy. The suburbs I recognise (I'm rusty on my WA geography) have been considered high risk by numerous lenders for over a decade at this point. What's surprising for some of them is the implication that previously AMP would have lent money in those locations.

 

Would most lenders have similar lists in place ?

Does the existence of such lists make it harder for developers to get their projects off the ground ?

Cliff

 

If enough lenders do, I would say undoubtedly.

 

Many lenders do indeed have similar lists. There was a few headlines last year about NAB having postcode restrictions, but they've also been there for years. The NAB would restrict LVRs to 70% in many of these suburbs.

Westpac have a list of specific addresses, mostly highrise appartments in the CBDs of each states, it's a long list.

ANZ have some restrictions as well.

CBA doesn't have postcode restictions, but it gets reflected in their credit scoring system. They'll lend to any postcode, but the security address will be reflected in their credit scoring and if it drops too low they reject the application.

Many smaller lenders are reluctant to lend in these locations with LVR restrictions or simply not touching them. Both Genworth and QBE (mortgage insurers) have links on their websites regarding postcodes regardless of LVR, many lenders simply follow these lists.


All that said, I don't think it has a significant impact on the funding of commercial developments, only a modest one. In this space, lenders are looking for the exit strategy. If the developer has plenty of presales, there'll be a lender who'll consider funding it. There's still plenty of marketing companies spruiking these developments and getting sales. A lot of the developers risks are transfered to the eventual purchasers. Developer profits are still being made.

Over the next year we'll likely see plenty of lenders rejecting loan applications from people who bought a few years ago. This could affect future approvals to developers. We'd need to see a nasty correction in this market segment first, which is quite possible.

 

pre-sales done 6 months ago the purchases now cant settle on because of these lists and the developer gets stuck with them until the bank forecloses.....

 

any examples ?

Cliff

 

The noose is certainly tightening for above 80% LVR investment lending and OTP properties. Who is left in this space? I think we will see some real pain if CBA pulls out of this lending which they are likely too.

 

I have a client right now who signed a contract about 1 year ago for a house and land. The land was expected to be 6 months to be titled, with a constructon contract to commence building immediatley on the land settlement. At the time servicing was fairly decent with a few good looking options.

Today, I've got one lender that I think will do it at reasonable rates. Perhaps a second at unreasonable rates. I've litterally spent days working out the angles, reviewing the exact amounts required, the servicing and so on. I'm still very, very nervous about it. Hoping to have results in the next few days.

At the time he was signing the contract, everything stacked up confortably. Nothing in the clients circumstances has changed, only the lenders policies.