Join Australia's most dynamic and respected property investment community

Apartment lender AMP ‘blacklists’ more than 140 suburbs

Discussion in 'Property Finance' started by Jennifer Duke, 23rd Mar, 2016.

Tags:
  1. Jennifer Duke

    Jennifer Duke Well-Known Member

    Joined:
    23rd Oct, 2015
    Posts:
    289
    Location:
    NSW » Sydney
  2. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,113
    Location:
    Brisbane
  3. Jennifer Duke

    Jennifer Duke Well-Known Member

    Joined:
    23rd Oct, 2015
    Posts:
    289
    Location:
    NSW » Sydney
    Bahaha snap!!!
     
    Gingin likes this.
  4. See Change

    See Change Timing Lord Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    2,145
    Location:
    Sydney
    link work not , think me

    cliff
     
  5. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,392
    Location:
    Sydney
    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
     
  6. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,113
    Location:
    Brisbane
    Interesting to see no ACT suburbs on that list.
     
  7. Jennifer Duke

    Jennifer Duke Well-Known Member

    Joined:
    23rd Oct, 2015
    Posts:
    289
    Location:
    NSW » Sydney
    Our IT department is working on it atm.
     
  8. RetireRich101

    RetireRich101 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,312
    Location:
    Sydney
  9. Jennifer Duke

    Jennifer Duke Well-Known Member

    Joined:
    23rd Oct, 2015
    Posts:
    289
    Location:
    NSW » Sydney
    Bahaha. Nah we've had some teething problems today, nothing major. Hopefully will all be sorted soon. :)
     
  10. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,173
    Location:
    Adelaide, SA
    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.
     
    Jennifer Duke and Terry_w like this.
  11. See Change

    See Change Timing Lord Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    2,145
    Location:
    Sydney
    Nice to see Teneriffe doesn't come up on the list :)

    Cliff
     
  12. Jennifer Duke

    Jennifer Duke Well-Known Member

    Joined:
    23rd Oct, 2015
    Posts:
    289
    Location:
    NSW » Sydney
  13. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,104
    Location:
    Melbourne, Nationwide
    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.
     
    Jennifer Duke likes this.
  14. See Change

    See Change Timing Lord Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    2,145
    Location:
    Sydney
    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
     
    Jennifer Duke likes this.
  15. Jennifer Duke

    Jennifer Duke Well-Known Member

    Joined:
    23rd Oct, 2015
    Posts:
    289
    Location:
    NSW » Sydney
    If enough lenders do, I would say undoubtedly.
     
  16. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,104
    Location:
    Melbourne, Nationwide
    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.
     
    Last edited: 23rd Mar, 2016
  17. tobe

    tobe Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    895
    Location:
    Melbourne
    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.....
     
  18. See Change

    See Change Timing Lord Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    2,145
    Location:
    Sydney
    any examples ?

    Cliff
     
  19. Marty McDonald

    Marty McDonald Mortgage broker

    Joined:
    22nd Jun, 2015
    Posts:
    228
    Location:
    Sydney North Shore and Norther beaches
    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.
     
  20. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,104
    Location:
    Melbourne, Nationwide
    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.