Westpac tightens rules for off-the-plan purchases

Posted: 20 February 2017 3:41 pm

off the planAs lenders continue to tighten the rules around lending to investors, Westpac has added new rules around purchasing off the plan.

After a round of lenders tightening the belt on investor lending last week, Westpac has chosen to make some changes to lending criteria around off-the-plan purchases. Purchasers looking to purchase an apartment off the plan will be required to wait for an in-person valuation before getting final loan approval.

According to the Australian Financial Review, Westpac will introduce new rules that will require a valuer to inspect the physical property as soon as occupational health and safety rules allow, typically a few weeks prior to completion.

“A property must be completed before the valuer can physically inspect and complete the valuation,” a confidential Westpac document stated, according to the AFR.

Previously, banks would offer approvals based around reviewing the properties plans and looking at the prices of the surrounding area and other similar properties. Off-the-plan properties would typically have two valuations; one that offers conditional approval when reviewing the plans and possibly visiting the display, and then a final valuation upon approval.

Tips to get a loan for an off-the-plan apartment

Tony Kelly, managing director of Herron Todd White, was reported by the AFR as saying tougher inspections will guarantee quality and boost industry standards.

The report did note that there could be issues if the completed apartment’s value is less than the original price, whether this is due to market changes or construction issues. Industry experts who didn’t want to be named told the AFR display fixtures and finishes can often be of higher quality than the finished product.

Latest home loans headlines

Image: Shutterstock

Find the right home loan now

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site