A deadly combination of stagnant values, rising rates, and an influx of supply has resulted in the Westpac Group advising who they consider ‘risky investors’ to find a new lender.
The property sector is already under pressure due to stricter prudential regulation. No matter the pressure that investors may be under, Westpac is committed to cutting down on risky lending. The bank has begun sending letters to borrowers stating that the bank can, “no longer support our commercial relationship with you.”
Westpac is willing to help investors find other lending opportunities, but the bank is no longer willing to participate in high risk lending.
All of this follows APRA’s findings that there was a significant increase in high risk loans provided by major banks in the past 12 months, directly in opposition of the new prudential guidelines.