ANZ has tightened its restrictions on lending to apartment buyers in 18 suburbs in Brisbane and seven of Perth’s suburbs as regulators continue to warn on the apartment glut, most recently singling out the rash of development in Brisbane.
The bank issued a list of postcodes to its mortgage brokers where loan to value ratios must not breach 80 per cent for off-the-plan and existing apartment lending.
ANZ’s toughened stance comes on the heels of Reserve Bank assistant governor Luci Ellis warning last week that it was “crunch time” for Brisbane’s apartment market noting that older units were particularly vulnerable to falling prices.
Banks have continued to tighten their criteria in the wake of regulator limits for investor lending, meanwhile a survey by UBS found loans where borrowers had “lied” or misrepresented their finances had risen.
The list of Brisbane postcodes includes inner city suburbs such as Fortitude Valley, Bowen Hills and Newstead that have been at the front of the development wave, but also the middle ring suburbs of Clayfield, Hendra and Nudgee where there has been new development, but that also have a significant number of older apartments.
In Perth, the list includes the CBD and East and South Perth.
The ANZ policy, which comes into effect on October 2, applies to apartments for both owner occupiers and investors in Brisbane and investors only in Perth on properties worth less than $3 million.
BIS Oxford Economics residential property manager Angie Zigomanis said a recent study found 40 per cent of apartments in Brisbane had been resold at a loss or the same price since their off-the-plan purchase after mid-2011. Further loss making sales were expected, he said.
More than 5300 units have been finished in inner Brisbane this year, and there are another 11,000 being built. The median unit price in Brisbane fell 2.3 per cent in the June quarter but house prices are still rising.
ANZ’s list of postcodes:
Brisbane: 4000, 4006, 4010, 4011, 4014, 4102, 4171.
Perth: 6000, 6004, 6104, 6151.