ANZ Banking Group has made things much tougher for overseas buyers wanting to invest in Australian real estate using overseas funds.
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.
Now there will be a maximum loan-to-value ratio of 70%, no loans in a company name, no guarantor arrangements and restricted construction lending.
In addition, foreign salary earner applicants must pass six stringent documentation tests that include providing comprehensive employment contracts, tax returns, current visa documentation and original, untranslated supporting documents.
Self-employed applicants will need to provide confirmation the business has been running longer than two years and details of ownership structure.
Those borrowing with less than 50 per cent of foreign income will also have to provide additional documentation.
Only 4 months ago the bank announced tougher rules to prevent fraud and money laundering, including insisting on original copies of untranslated supporting documents required for a loan application and tightened passport scrutiny, such as foreign applicants having to provide all stamped pages.
Easier for expats
Expatriate Australians working overseas will not be impacted by the lending restrictions but will be required to provide the extra documentation.
But the bank recently increased the range of products for which temporary, or provisional visa holders, will not be eligible.
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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au