30 May 2016

Banks Stop Loans for Foreigners

The window of opportunity to own a piece of Australia has just slammed shut – for foreigners. Well, that’s not true, foreigners can still buy properties in the country, it’s just much harder and more expensive.

Westpac Banking, the Commonwealth Bank of Australia, the National Australia Bank, and the Australia & New Zealand Banking Group are all putting heavier restrictions on their loan lending schemes. Basically, any person who is not a citizen, or does not possess the correct residency visas will have a beast of a time just getting the money for the purchase. Meanwhile, lenders such as RapidLoans.com.au are bringing their A-game in an effort to give citizens faster loans when they need it.

This is part of an almost national effort to scrutinise foreign buying of Australian homes, and tighten funding leaving the country. If you haven’t been paying attention for the past seven years, foreigners – mainly from China – have been buying properties within the country en masse. This caused the property costs in almost every state to jump as much as 55% since the whole situation began.

The fact that actual Australians are having a harder time buying their own houses is bad enough. But, for the biggest reason behind the situation to be foreign buyers jacking up the price is too much for most people to handle calmly. The placement of policy barriers between further foreign buyout and continued price escalation is the quickest solution to stem the tide, and appease the public.

There have been moves on the state level that attempt at something to the same effect. Victoria, for example, is proposing to double the income tax on foreign-owned properties starting July 1. It doesn’t matter how rich a buyer is, doubling the annual cost on anything is going to make them think twice about entering a market.

Tags: , ,