Singaporeans looking to buy property in Australian are facing more hurdles after major Australian banks imposed tighter lending criteria to non-residents.
The Commonwealth Bank said it will no longer approve applications that cite self-employed foreign currency income. It will also reject foreign currency income of temporary Australian residents while those with Australian-dollar incomes can borrow only up to 70 per cent of the property value—a 10 per cent decrease from the previous 80 per cent.
Likewise, the National Australia Bank has cut the maximum loan-to-value ratio from 80 per cent to 60 per cent for non-resident home loan applications. Meanwhile, Westpac has said that it will stop making home loans to non-residents, temporary visa holders, and those with foreign self-employed income.
But in spite of these stricter rules, brokers and agents believe that Singaporean investors will not be badly hit.
"Singaporeans, in general, are still viewed rather favourably as they are able to produce income or bank statements from reliable sources," said Anson Tay, PropNex International head of international markets.
Furthermore, there are still avenues to obtain home financing.
"We have 20 lenders in Australia on our panel, and they are still lending," said David Moss, managing director of Australian mortgage advisor David and Partners. "Probably the biggest change is not so much that they are not lending, it is the additional documentation required for loans."
In fact, investors are more concerned about the additional stamp duty surcharges than the tighter lending criteria. Both Victoria and New South Wales have imposed a three and four per cent stamp duty surcharge, respectively, to foreign property buyers in Australia.
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