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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.

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BFCSA: Commercial property the bigger risk to Major Banks: Fitch Ratings

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Commercial property the bigger risk to banks: Fitch Ratings

Sydney Morning Herald May 17 2017 - 12:15am

Clancy Yeates

 

Losses on commercial real estate loans pose a more immediate risk to Australia's banks than developments in the housing market, where regulators are putting the brakes on riskier lending, Fitch Ratings says.

However, foreign banks are more likely than the local lenders to feel the pain if there is a sharp increase in buyers who cannot settle their off-the-plan purchases.

After a recent surge in apartment building, the credit ratings agency on Tuesday highlighted losses on loans to property developers as a more pressing concern than residential mortgages, which dominate banks' loan books.

Tim Roche, head of Australia and New Zealand financial institutions at Fitch, told the ratings agency's conference in Sydney that foreign bank exposure to Australian commercial property had roughly doubled since 2013.

While the Commonwealth Bank, Westpac, National Australia Bank and ANZ Bank have been more cautious and kept their commercial loan portfolios essentially flat in recent years, they remain the dominant lenders to this part of the market. It's estimated about a quarter of the big four's commercial property exposure is to developers, a lower percentage than during the global financial crisis.

"The greater risk, at least in the short term, is more on the commercial real estate side, particularly around the development that we're seeing in some pockets of the market," he said.

Approvals for non-house developments such as apartments, duplexes and town houses close to doubled in Melbourne, Sydney and Brisbane in the three years to 2016, raising the risk of over-building.

"That's really where we think the pressure could come through," Mr Roche said.

"We think it's more likely to come through, at least over the next 12 months, in the commercial real estate exposures of the banks."

The concerns echo comments from the prudential regulator, which last month said it would put bank lending in this segment under the microscope and may issue "further guidance" to banks.

It comes as the surge in building has helped make Sydney the ninth most expensive city in the world to build new property developments, according to a new survey from Turner & Townsend.

Melbourne was 20th most expensive city to build in the world, while Brisbane was 22nd.

The survey, which looked at input costs including labour and materials, found residential construction spending had surged by 54 per cent since 2015 in Sydney, and building costs in the city had lifted by about 9 per cent over this period.

 

A report from Deloitte Access Economics this month reported that development of apartments had been so rapid in Sydney and Melbourne that it was likely to create a shortage of office space, pushing up rents.

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