Non-major lender cuts off finance to more than 100 postcodes

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Borrowers looking to fund a property purchase in more than 100 postcodes across Australia will now have to be more selective, with one lender reportedly cutting off finance for some dwellings

According to leaked documents obtained by Fairfax media outlets, non-major lender AMP compiled a list of 140 postcodes across Australia in which it will not provide fiancé to borrowers looking to fund apartment purchases.

The leaked documents claimed the postcodes have been designated no-go zones for a range of reasons, including falling prices and the prevalence of off the plan sales.

Postcodes in inner-city areas in Sydney and Melbourne, which have been shrouded by over supply concerns in recent times are also on the list.

A spokesperson from AMP said the bank was taking a cautious approach to balancing its mortgage book and is continuously assessing market conditions

“AMP Bank takes a prudent approach to managing risk.  We take into account a range of factors with our lending policies, including using data provided by industry participants to assess trends and information on postcodes,” the spokesperson said.

“We have identified certain high density living areas where we have put provisions in place to manage risk around over supply. These provisions are regularly monitored and assessed on an ongoing basis,” they said.

AMP is not the first lender blacklist post codes, with it being revealed last year that NAB had a list of at least 40 post codes that it had concerns about, while media reports earlier this week suggested ANZ had 50 suburbs where it had concerns about supplying mortgages too.

The cautious approach from AMP also comes after it temporarily suspended investment lending in 2015 after exceeding mandated growth limits from the Australian Prudential Regulation Authority.
 

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