Housing affordability and Foreign buyers
Wednesday, April 27, 2016
Housing affordability is a hot issue and lending criteria is tightening. Matt Clayton, IMFG Lending Specialist, provides an update on changes taking place in the Australian home lending market.
In the past 24 hours we received notifications from two of our major lenders (one major bank) that have made an unprecedented change to their LENDING policies. Both are no longer willing to lend to Foreign Investors.
This means that they are now only willing to lend to Australian Citizens (inclusive of Expatriates living abroad) and permanent residents of Australia.
The fact is, this will not stop overseas investors as we know many have the money to buy Australian properties outright, however it will definitely reduce the overall volume of buyers.
This is really positive news for the thousands of local potential buyers wanting to get in to the market. Finally some slowing down in the overseas space!
The banks will no doubt market this as “them doing their bit to make housing more affordable for the first home buyers” however it is more regulation based and a means to protect the lenders exposure to potential bad debt.
We will have to wait and see the fall out of this however if I were a betting man I would be placing a wager on other lenders following suit.
As we raised in our blog article of October 2015 (Preparation Protects from Property Pullback Predictions), this is another example of lending criteria becoming tighter. For the types of people we help, this means it is a good time to have a second opinion review of your existing home loan. Should you want to have a review of your lending arrangements please contact our office to speak with one of our Lending Specialists.
ABOUT THE AUTHOR:
Matt Clayton is a professional Mortgage Broker for successful people and their families in the Sydney area.
IMFG is a financial services business with a difference. Our clients are supported by a team of specialists, not generalists. We believe that the most successful people have their financial house organised within an elegantly simply framework aligned with their dreams, vision, values and goals.
This article is intended to provide general information only and has been prepared without taking into account any particular person's objectives, financial situation or needs. Persons should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend persons obtain financial advice specific to their situation before making any decision regarding a financial product or decision.