Lenders should be required to provide a funding pre-approval that will last off-the-plan buyers until settlement, property agency says... Too early to hail APRA moves a success: Moody's...
Lenders should take more responsibility to protect off-the-plan buyers
Lenders should be required to provide off-the-plan apartment purchasers with a funding pre-approval that will last them until settlement, a leading online property agency has argued.
iBuyNew CEO Mark Mendel said if banks are prepared to fund a development for construction then they should take the same stance on providing finance when it comes to the buyers of those apartments.
“The banks should be offering to fund the buyers of those apartments under the same policy that exists when the construction started,” Mendel said.
“Buyers of off-the-plan apartments should be able to go to the bank that funds the construction and take out a pre-approval that will last them until settlement.
“This reduces a part of the risk for the buyer as they don’t have finance risk. It also reduces problems for the developer as they don’t have settlement risk and overall it’s a win/win situation for the bank.”
Too early to hail APRA moves a success: Moody's
A global credit rating firm believes signs of renewed capital growth in Australian real estate could bring danger for the country’s banking sector and broader economy.
While investors and home owner were likely buoyed by recent market analysis that showed stronger than expected price growth in a number of Australian markets over recent months, Moody's Investors Service said that combined with rising household debt to income ratios could spell trouble.
"These trends are unfolding against a backdrop of already high levels of household indebtedness, and elevated overall leverage in the economy," Daniel Yu, a Moody's vice president and senior analyst said as the rating firm released a new report, House Price Growth is Increasing Tail Risks for Australian Banks.
"The current trends are therefore credit negative for Australian banks, particularly in the context of the banks' high ratings, because these trends raise the banks' sensitivity to any potential deterioration in the housing market," Yu said.
(Your Investment Property)
Lenders should be required to provide off-the-plan apartment purchasers with a funding pre-approval that will last them until settlement, a leading online property agency has argued.
iBuyNew CEO Mark Mendel said if banks are prepared to fund a development for construction then they should take the same stance on providing finance when it comes to the buyers of those apartments.
“The banks should be offering to fund the buyers of those apartments under the same policy that exists when the construction started,” Mendel said.
“Buyers of off-the-plan apartments should be able to go to the bank that funds the construction and take out a pre-approval that will last them until settlement.
“This reduces a part of the risk for the buyer as they don’t have finance risk. It also reduces problems for the developer as they don’t have settlement risk and overall it’s a win/win situation for the bank.”
Too early to hail APRA moves a success: Moody's
A global credit rating firm believes signs of renewed capital growth in Australian real estate could bring danger for the country’s banking sector and broader economy.
While investors and home owner were likely buoyed by recent market analysis that showed stronger than expected price growth in a number of Australian markets over recent months, Moody's Investors Service said that combined with rising household debt to income ratios could spell trouble.
"These trends are unfolding against a backdrop of already high levels of household indebtedness, and elevated overall leverage in the economy," Daniel Yu, a Moody's vice president and senior analyst said as the rating firm released a new report, House Price Growth is Increasing Tail Risks for Australian Banks.
"The current trends are therefore credit negative for Australian banks, particularly in the context of the banks' high ratings, because these trends raise the banks' sensitivity to any potential deterioration in the housing market," Yu said.
(Your Investment Property)
