From Mortgage Professional Australia.
Banks are cracking down on loans to borrowers buying into Brisbane’s over-supplied apartment market, with a number of risky postcodes identified, which require bigger deposits.
The four major banks – Westpac, Suncorp, Australia and New Zealand Banking Group (ANZ), and National Australia Bank (NAB) – are restricting lending for certain Brisbane postcodes, where apartment buyers will now be required to have a deposit of up to 20% to qualify for a home loan.
Suncorp has blacklisted nearly 40 postcodes in the Queensland capital, including Inner Brisbane, Teneriffe, Fortitude Valley, Bowen Hills, and Herston.
The banks are refusing to loan more than 80% of the cost of a unit due to “[weaknesses] in the investment market” as well as the current oversupply in inner-city apartments. Prices for apartments in inner-Brisbane have dropped to their lowest level in three years and a recovery is not expected for at least another 12 months.
According to the Domain Group’s State of the Market report for the September quarter, Brisbane’s median apartment price was $376,685 during that quarter – down more than 3% over the quarter and more than 6% year-on-year.
Andrew Wilson, chief economist at the Domain Group, said the supply of apartments in suburbs such as the West End has outstripped demand.
“Even some of the outer suburbs such as Chermside have had significant levels of development recently, and as a consequence, supply has moved ahead of demand,” he told ABC News. “But if we look at the approvals … that [has] declined sharply so when the existing stock is soaked up there certainly will not be a lot of replacement stock coming through.”
Last month, RBA Governor Philip Lowe said that Brisbane’s property market was coming under closer scrutiny.
“We are … watching the Brisbane property market carefully, particularly the effect on prices of the large increase in the supply of new apartments,” he said during a dinner.
According to the Reserve Bank’s latest Financial Stability Review, nationally, apartment prices have continued to record weaker price growth than detached housing – a weakness that is consistent with the increased supply of apartments.
“Some concerns remain about the process of absorbing the substantial increase in new apartments in Brisbane. Brisbane apartment prices continue to fall, although the rate of decline has slowed,” the RBA said.
Here are the top 10 Brisbane postcodes that require a 20% deposit:
| 4000 | Inner Brisbane |
| 4010 | Albion |
| 4006 | Fortitude Valley, Bowen Hills, Newstead, Herston |
| 4101 | Highgate Hill, South Brisbane, West End |
| 4102 | Dutton Park, Woolloongabba |
| 4005 | New Farm, Teneriffe |
| 4011 | Clayfield, Hendra |
| 4032 | Chermside |
| 4122 | Mansfield, Mount Gravatt, Wishart |
| 4171 | Balmoral, Bulimba, Hawthorne |
One thought on “Banks blacklist Brisbane postcodes”