For those who continue to believe the credit tightening is temporary...

That is going to be very bad for some Asian brokers / developers. What is the sudden revulsion to foreign borrowers being driven by? Someone in management finally realizing how Westpac was able to keep their lending numbers going from 2009 onward?

 

Westpac have been the predominant lender for the asian markets for years now thanks to a few policies that result in less than compliant applications. Outside of these markets they're not exactly competitive, we only do a handful of deals with them each year.

This is going to have a very interesting outcome for Westpac, especially when aligned with some of their other recent announcements.

 

What will this mean for property prices?

Maybe foreign investors will use Australian proxies to obtain their loans?

 

I am not that naïve, I think we are in for a bumpy ride
thanks for the feedback

 

Percentage wise, how much would the loan apps from non-residents generally be?

 

The professional fraudsters will find a new way to buy Australian property now they've been shut down by some lenders. What should've happened is that rather than preventing any foreign loans, the properties obtained via fraud should be sold off, like those properties that were purchased outside of the foreign ownership rules. How many cleaners and process workers will be able to hold onto their million dollar plus properties without any recourse?

 

Does this include non-resident citizens?

 

Lets see... with APRA and FIRB restrictions, Foreign loans, Bank inquiries, NG and CGT politics, Mining, manufacturing and car industry.., :

 

If the perma bears keep wanting it long enough, eventually they'll get it

 

I would suggest you are either fairly young or you haven't followed the property market in this country very long.

 

Impossible to know as until recently the FIRB wasnt even keeping data ..... but I do know that within the industry it's widely acknowledged that Westpac/STG/BOM/BSA have a dominant market share believed to be @ 65% + of all non resident lending. There will be lots of very very large foreign investor focused brokers at Connective, AFG, PLAN and elsewhere, scrambling to find a new fave lender now, and accepting that they are going to have to start asking their offshore clients to stump up far more paperwork.

This is not very good news for the tens of thousands of OTP Brisbane, Sydney and Melbourne apartments believed to have been purchased by non residents ...

This could now get very very ugly for big developers...

 

Holy moly... things are getting interesting indeed....

 

I second this question, where do expats stand with this policy?

 

Direct quote from Westpac: "Westpac will no longer lend to offshore customers who are not citizens or residents of Australia with an eligible visa.

It continues to be Westpac's priority to support Australian citizens and Permanent residents (including applicable visa classes) living outside of Australia on their journey to own a home or investment property in Australia"

 

Expat policy is dependent on the lender.

Some lenders treat expats in the same way they treat true non-residents and others will treat them more leniently.

CBA have the best overall lending policy for expats. In their case they will accept overseas income provided they you are an Australian citizen and the currency fits their currency list. Therefore they will go up to 95%.

Other lenders like Westpac treat expats differently and will go up to only 70% however they do accept a broader range of currencies than CBA.

Another layer of complexity is if one is an Australian citizen and the other is a non-resident – some lenders again will take the lower (being the non resident) and others such as NAB will take the higher (being the Australian citizen).

Overall the major lenders are pulling back creating potentially an opportunity for the smaller lenders to step in. A lot of the brokers have been churning applications to majors and not utilizing the smaller lenders.

 

As usual, its private industry leading government.
FIRB was put in place in '07 to halt any harmful foreign investment - turns out they had their thumbs up their bums. Meanwhile FHBers reporting increased competition at Auctions from foreign nationals, all-the-while the media and government ignored the issue before pulling the race card.
Only recently has their been any investigation into foreign ownership and it wasn't until mid 2015 that the government did anything (ATO powers). Sad state of affairs when we have a bank now leading government by cutting off credit.

Foreign investors were never meant to be here forever - they were just a tool for citizens to sell out and deleverage.

 

.....and the irony in all this is that Westpac HK is still lending to HK residents @ rates of 2.5%. 70% LVR.