It's 'postcode discrimination', one resident says
Twenty-seven-year-old barista Mary McNair moved from Brisbane to Quilpie, Queensland a year ago, determined to be a first home buyer in the tiny outback town – until she hit a roadblock with the banks.
In an interview with ABC News, McNair shared that the banks she approached either did not loan for outback property or required “such a hefty deposit that you may as well be paying for the whole thing yourself.”
“We would get to the end of an application and [a bank] would just say they don’t lend to postcodes out here,” she told the news outlet. In one instance, the bank with whom McNair was about to settle a loan with suddenly required an extra 10% deposit.
“It was just impossible,” she said.
It took McNair several months and mortgage brokers before she managed to secure a loan with a 30% deposit.
Residents across western Queensland have similarly claimed banks either flatly denied loans based on their postcode or required massive deposits of up to 50%, leading Quilpie Shire Council chief executive Justin Hancock to call for banks to update their lending criteria.
“We have locals who have secure employment and strong salaries who have been rejected for loans due to a completely outdated set of lending criteria,” Hancock said to ABC News. “It’s unfair and short-sighted.”
The council launched a home builders grant last year to address the region’s housing crisis. Underwritten by the council, it reimburses anyone who purchases a block of land in the shire by up to $12,500 when they build and live in the house for at least six months.
But many young families want to buy homes already built, Hancock reported.
“There’s a lot of different hurdles that the banks are putting up and if we don’t find a way to lend money to residents to buy houses, we’re going to see houses become vacant and people move on,” he said.
Commonwealth, National Australia Bank, ANZ, and Westpac have all said there was no postcode ban on finance, and that they actively lend to buyers in the outback.
But in nearby Thargomindah, mechanic Rob Warner said he encountered “every barrier possible” when he tried to buy his local roadhouse, including from the big four. “[As] soon as we put the postcode in, [the banks] pretty much said everything changes and ‘no’,” he told ABC.
Warner eventually asked the roadhouse’s seller to guarantee him the loan to get it approved.
“[It’s] postcode discrimination,” he said. “It’s a disincentive for anyone to move to the outback. If people need a 40% deposit, no-one is going to do it.”
