NAB and Westpac cool on high-risk investors as banks retreat from trust lending
The big four banks are all in retreat, to varying degrees, from one of the riskiest corners of the property investing market. It could leave second-tier lenders to fill the void.
National Australia Bank and Westpac are actively reviewing their lending to property investors using trusts and company structures to boost their borrowing power.
The move, relayed by sources and confirmed by Capital Brief, comes after this publication revealed Macquarie had ceased lending to trusts and companies and after Commonwealth Bank tightened its rules around the practice.
It means all of the big four banks are retreating from one of the most speculative parts of the property market in some shape or form. ANZ hiked its interest rates on loans to structured investors more than a year ago in a sign it wasn't interested in the risk.
Investors using trusts have become a fast-growing cohort of the property market, with many participants often advised by unregulated buyers agents to use the structures to maximise their leverage and quickly build their portfolios.
