Lender implements high rise lending restrictions

by Julia Corderoy24 May 2016
Macquarie Bank has revealed it will restrict lending to high rise and high density apartment dwellings in more than 100 postcodes nationwide amid apartment oversupply fears.

A confidential memo sent to mortgage brokers says that from Monday 23 May, the bank will decrease its maximum LVR to 70% for these types of dwellings in up to 120 postcodes across the country. This is down from the previous maximum LVR of 80%.

Postcodes in Sydney include Dawes Point, The Rocks, Alexandria, Ultimo, Zetland, Concord West and Rhodes. 

Postcodes in Melbourne include the World Trade Centre precinct, South Wharf, Southbank, South Wharf, Docklands and St Kilda Road Central.  

The list includes more than 40 Queensland postcodes mainly in the central business district, inner suburban and Gold Coast areas. City and inner-suburban postcodes for Adelaide, Perth and North Hobart are also listed.

According to figures from CoreLogic RP Data, there are 92,102 new units set for completion over the next 12 months with that figure rising to 231,129 over the next 24 months, concentrated mainly in Sydney and Melbourne.

CoreLogic RP Data research analyst Cameron Kusher said settlement risk is something that CoreLogic will be keeping a very close eye on.

The large volume of new stock, coupled with an ever-growing supply of existing stock which resells, means that historic high levels of unit settlements are due to occur over the next two years in most cities, he said.

Australian Broker contacted Macquarie Bank, who declined to comment further on the lending restrictions.