Reportedly, a large Australian bank has placed 6700 apartment projects on a blacklist, whereby buyers are refused loans or offered reduced loan rates.
According to mortgage broker Home Loan Experts, blacklisted locations include 19 Larkin Street in Camperdown in inner-city Sydney, 1 Janoa Place in Chiswick, inner west Sydney, Finbar’s Aire apartments in West Perth and Meriton’s developments on Main Beach on the Gold Coast.
Though every major bank reportedly has a unique blacklist, several areas are common targets, including Wolli Creek and Zetland in inner south Sydney and the Brisbane CBD.
Also common is the motivation, according to Home Loan Experts managing director Otto Dargan – avoiding high-risk investments. Serviced apartments and converted hotels are considered high risk, as are those in a location with a surplus of new units.
The density of a project is a crucial element, a project with 30 or more apartments likely to be blacklisted. A bank may also blacklist apartments if they have already reached maximum exposure to the project with existing loans.
With the current shaky real estate market, particularly in targeted areas such as Sydney, this mitigation of risk detriments some projects and buyers, but is a commonplace and prudent step for banks.