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Suncorp blacklists your suburb!


Big banks are set to announce tougher measures to crack down on high rise apartment purchases including blacklisting more than 100 Brisbane suburbs, doubling the minimum apartment size to qualify for funding, evidence of rental cash flows and tough new valuation criteria.

Lenders such as Adelaide Bank are introducing "minimum funding requirements" requiring apartments to have their own bathrooms, kitchens, laundries, and windows in key rooms, such as bedrooms and lounge rooms.

Others, such as Suncorp Bank, the nation's fifth largest mortgage lender, are circulating a list of 39 Brisbane postcodes covering more than 100 city and metropolitan suburbs where the new lending restrictions will apply from next Monday.

"Our settings have been adjusted for postcodes based on recent weakness in the investment unit market in Brisbane, with evidence of a reduction in prices," a Suncorp Bank spokesman said.

suncorp restricts lending to local suburbs

McDowall and Everton Parks No 1 rated real estate agent Madeleine Hicks said "suburbs like McDowall, Stafford, and Everton Park, are really a victim of what has been happening in neighboring suburbs Chermside and Nundah.  A lot of units have been built in those suburbs and we are paying the price"


"Whilst there has been some unit development in our main suburbs it has been nothing compared to our neighbors," said Hicks.

Nervous lenders are turning the screws on apartment buyers amid growing concerns about over-supply, falling prices, restrictions on foreign buyers and potential risk from combustible cladding widely used on high rise apartment exteriors.

For example, new apartment sales in the Queensland capital have reportedly collapsed by more than 70 percent in a year, prompting desperate developers to offer lucrative incentives to attract buyers.

Developers, such as Consolidated Properties, claim Brisbane has been cruelled by restrictions on financing set up to ease speculative buying in Melbourne and Sydney.

Other developers, such as ForceOne Development, have been using incentives like a free Toyota Yaris to encourage apartment sales.

AdelaideBank, a division of Bendigo and Adelaide Bank, will today (Wed) announce stricter controls on apartment lending that include bigger sizes, better design, identifiable cash flows for investor/lands and more stringent calculations of a borrowers' capacity to repay.

 On the Plus side

"Now presents a great opportunity for cashed-up investors to get into the growing Brisbane market and take advantage of bargains that exist.  We know that the population in Brisbane will continue to increase and that will mean there will always be strong demand for homes in the inner suburbs," said Madeleine Hicks

In fact, Ms. Hicks called for "greater investment in infrastructure in the Stafford, McDowall and Everton Park suburbs to better reflect the increase in population that is moving into these suburbs.  This only seems fair as the Council is collecting greater revenues but not spending the money here."

The Minimum requirements for high-density apartments to obtain funding include windows in bedrooms and living rooms, separate bathrooms, and their own laundries and kitchens. High-density apartments are complexes of more than 50 units or five stories.

Minimum sizes for two bedroom apartments have been doubled to 60 square meters and timeframes for off-the-plan valuations have been reduced from six to three months to "better the risk" and "align acceptance of applications and valuers' professional indemnity cover".

Last month Australia and New Zealand Bank also issued a blacklist imposing tougher terms requiring borrowers to have a 20 percent deposit.

The value of apartments has fallen by about 1 percent in Brisbane during the past 12 months, according to SQM Research, which monitors property prices.

Several recent reports by independent consultants have warned demand will be exceeded by the estimated supply of new apartments in Brisbane, which will add to downward pressure on prices.

There is also growing investor concern about the outcome of current investigations into the widespread use of inflammable cladding on apartments, particularly who will be liable for its replacement.

 Under Suncorp's new rules, it will no longer accept investment loan applications for apartments that do not have a minimum deposit of at least 20 percent.

What do you think are the banks right to restrict lending in certain suburbs only?

Source Brisbane Investor

Newmarket Brickworks development to go ahead, despite 1000 submissions

Newmarket Brickworks redevelopment

More than 1000 submissions opposing a development will not stop an industrial site full of businesses in Brisbane's north being bulldozed to make way for hundreds of townhouses and units.

Brisbane City Council approved the conversion of the 4.6-hectare Alderley industrial site at Mina Parade to be zoned residential on Tuesday, the same day city planning chairman Julian Simmonds told his committee how protective the council was of industrial land.

Brickworks Newmarket

Brickworks Newmarket design by Rothe Lowman Architects

Photo: Ruth McCosker

Abacus Property Group submitted its development application for the site known as Newmarket Brickworks on June 30 last year, and on Tuesday the council gave it the green light to built 51 two-storey townhouses and 287 units across buildings between two and five storeys.

The site is currently occupied by several trading businesses including Flipside Circus, Brisbane City Indoor Sports Centre and Event Rental.

Council city planning chairman Julian Simmonds said the zoning of the Newmarket Brickworks site was changed during the development of the Ashgrove-District Neighbourhood Plan.

The state heritage-listed, 55-metre Newmarket Brickworks Chimney is also part of the site.The Newmarket Brickworks chimney, pictured in 2009.

 Event Rental Newmarket managing director Cliff Hughes said he had been told by the developer he would be informed about the approval immediately.

"We don't want to leave here. We love the location. We're an inner city hire company, a lot of our work is in the city and main parks and gardens in and around the CBD," he said.

Labor opposition planning spokeswoman Shayne Sutton said there had been an increasing number of applications to transition the city's industrial land.

"Council needs to be very very careful that we are ensuring that there is enough industrial land in Brisbane to satisfy needs," she said.

"Industry means jobs. This is about Brisbane's economic viability."

At Tuesday's city planning committee, Cr Simmonds said the council was protective of industrial uses.

"There's limited amounts of it in Brisbane city and we need to be very careful about where we hand it over to other uses," he said.

Cr Simmonds said on Thursday the Newmarket Brickworks site had been historically zoned for low-impact industrial uses, but was identified for redevelopment as low-medium density residential during the development of the Ashgrove-District Neighbourhood Plan.

"While the site previously served as the Newmarket Brickworks, the site is now wholly surrounded by suburban uses and Council has long envisaged the site being redeveloped as a residential area," he said.

Of the 1000 submissions received, many outlined concerns including traffic impacts and building height.

Cr Simmonds said heritage was a focus of the assessment and there was a vegetation plan for the site.

We are seeing a lot of land with older uses being transformed into residential housing.  Should we as a community be trying to retain some of the unique features that make our suburbs what they are?  Let us know in the comments below.

Thanks to Ruth McCosker from the BrisbaneTimes.com.au