It’s getting harder for foreign buyers to purchase Australian properties.
The Commonwealth Bank of Australia, which accounts for 25% of the nation’s mortgages, is the latest bank to tighten the rules for foreign buyers wanting to buy Australian properties.
The bank warned mortgage brokers it will no longer accept applications from applicants using self-employed foreign income for loan servicing.
Under the new CBA guidelines, the maximum loan to value ratios (LVRs) for temporary citizens living and working in Australia and being paid in Australian currency has been reduced from 80% to 70%.
These move follow Reserve Bank of Australia raising concerns about the “significant and increasing” role of Chinese investors in the Australian property market, which presented “indirect risks” to the financial sector.
They’re not the only ones:
ANZ also recently made things much tougher for overseas buyers wanting to invest in Australian real estate using overseas funds because of a spike in suspicious applications, which included missing passport pages, salaries paid by obscure offshore companies and crudely translated supporting loan documents.
The bank will no longer accept loan applications based solely on foreign income and for borrowers seeking loans based on more than 50 per cent of foreign income, there are measures about the size and source of funding and additional documentation will need to be provided.
National Australia Bank recently cut its LVRs for foreign applications from 80% to 70%.