Westpac has announced plans to withdraw new loan offers to self-managed superannuation funds (SMSF) looking to invest in property, following an internal review of its lending practices.
The nation’s second-largest bank and the country’s largest lender to property investors said it would no longer sell loans to SMSF owners for property investment from the start of August.
Westpac owns several lenders including RAMS, St. George Bank, Bank of Melbourne and BankSA.
The decision to "streamline its product offering" comes amid falling property prices and oversupply, particularly for apartments in Melbourne, Sydney and Brisbane.
Currently, using an established SMSF, Australian residents can use their super to borrow between $200,000 and $2 million in order to purchase investment properties.
“We continually review our products and services to ensure they meet the requirements of our customers,” a Westpac spokesperson said.
“In order to simplify and streamline our Self-Managed Super Fund products, we will be withdrawing from sale our SMSF Home Loan product and Business Lending to SMSFs, effective Tuesday 31 July 2018.”
Westpac said it would continue servicing its existing loans.
The move follows a widespread tightening of bank lending practices after the Australian Prudential Regulation Authority announced plans to remove the 10 per cent investor loan growth benchmark and replace it with more permanent measures to strengthen lending standards.
If the other big banks follow Westpac with this move then there could be even more negativity for the housing market to come.
Westpac will stop lending to SMSFs as of 31 July 2018.
Sourced: https://theurbandeveloper.com. Retrieved 18 July 2018