Offshore banks filling the gap for foreign property buyers

Adam Smith 11 May 2016

arrow up moneyMoves by major banks to curb foreign lending may not dampen overseas investment in Australian real estate.

The Australian Financial Review has reported that Chinese banks with retail lending capabilities in the Australian market are stepping up to fill the gap left by Australian major banks which shut down lending to foreign investors. The report has named HSBC, Industrial and Commercial Bank of Chine and China Construction Bank as lenders looking to maintain or increase their business flows from foreign buyers or buyers with foreign incomes.

The claim comes after ANZ, Commonwealth Bank and Westpac all said they would stop lending to offshore buyers or buyers reporting only foreign income.

CBRE agent Mark Wizel told the AFR foreign apartment buyers in Melbourne have shown increased interest in new developments, and have been able to secure funding from Chinese banks.

Foreign demand could be falling.

"It is now very clear why ICBC, Bank of China and China Construction Bank all opened retail branches in the best streets in the Melbourne CBD and Sydney CBD. They foresaw the potential challenges that Australian banks would face in lending to offshore apartment buyers,” Wizel told the paper.

Sources told the AFR Bank of China is also maintaining its foreign lending, but with an added degree of caution. They cited a source close to the bank who said the bank was still looking to lend, albeit with high prudential standards.

"They are not rushing to fill the gap, but will be cherry-picking some of the better quality applications for their books,” the source said.

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2 Responses to Offshore banks filling the gap for foreign property buyers

  1. Default Gravatar
    andrew | October 11, 2016

    do you lend to Australians to buy homes within australia

    • Staff
      Anndy | October 14, 2016

      Hi Andrew,

      Thanks for your question.

      Please note that we are a financial comparison and information website, not a lender.

      If you are looking for home loan products available to Australian residents for the purchase of property in Australia, you can check and compare here.

      You may also get in touch with a mortgage broker who will take all your circumstances into account and offer you a range of lending options.

      Cheers,
      Anndy

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