TWO Gold Coast suburbs have been red-flagged as risky areas to buy by one of the nation’s largest banks.
National Australia Bank will exercise extreme caution before giving borrowers buying in Southport and Labrador the tick of approval due to concerns about high prices and lack of demand among renters.
Market performance, rental returns, vacancy rates and time on the market to sell have been taken into consideration before these areas joined the list.
Home loan applicants will have to stump up minimum deposits of at least 20 per cent in these areas otherwise the bank will refuse to lend to them.
But Gold Coast real estate experts don’t agree that these two suburbs hold any more risk than others in the region.
Professionals Southport principal Andrew Wright said: “There is no real merit singling out Southport or Labrador.
“Southport and Labrador are no more risky than Broadbeach or Surfers Paradise.
National Australia Bank puts Gold Coast postcodes under microscope: Southport and Labrador deemed risky.
“The Gold Coast should be looked at as a whole. In our view the housing market in Southport remains strong and should continue to do so.”
REIQ chairman John Newlands said banks were clamping down on lending to areas deemed risky to protect themselves and homebuyers from future financial troubles.
He said he didn’t believe Southport or Labrador were risky areas to buy but a potential oversupply of apartments on the Gold Coast in years to come, due to development, could be cause for concern.
National Australia Bank puts Gold Coast postcodes under microscope: Southport and Labrador deemed risky.
“Profits are made when you purchase your property,” Mr Newlands said. “You need to do your homework so you know you are getting value.
“It comes down to the position … whether it is close to amenities, schools, workplaces, and near places people congregate, i.e. restaurants.”
First National Southport sales consultant Glenn Cogill said he struggled with the suggestion that Southport or Labrador were more risky.
“Southport is pumping, it is a seller’s market — every property we list we sell,” he said.
National Australia Bank puts Gold Coast postcodes under microscope: Southport and Labrador deemed risky.
A NAB spokeswoman said the bank was constantly monitoring market conditions.
“We recognise that no two suburbs are the same and there are some geographic areas across Australia which have been impacted by local economic conditions,’’ she said.
“We adopt strategies … that seek to reduce the risk to our customers and our business.”
The changes come into effect from Saturday.
Original article published at www.goldcoastbulletin.com.au by Sophie Elsworth & Kristy Muir 16/10/16