A leading property analyst has revealed the locations most likely to suffer from rises in interest rates or unemployment, in response to a major bank confirming it maintains a list of high-risk postcodes where stricter lending assessments may apply.
NAB has confirmed that it has a list of 40 postcodes where the bank may choose to apply more stringent lending criteria to home and business loan applications as a result of riskier market conditions.
The existence of the 'red flag' list was confirmed in a Fairfax Media report this week by NAB chief risk officer, David Gall.
"We do have higher-risk postcodes, and we make calls on what we think is the appropriate loan-to-value [LVR] ratio in those higher-risk postcodes," Mr Gall said.
Mr Gall would not disclose the postcodes included in the watch list, according to the report.
According to Mr Gall, factors making for a high-risk suburb include limited scope in employment opportunities and rapid shifts in property values.
"One of the things that we definitely factor in is where there is actually higher unemployment, or a risk of higher unemployment, given the reliance on single industries for a town or region. We will also look very closely at areas that have had very dramatic increases in property values to consider what is the right ongoing LVR ratio as well," he said.
The report went on to list suburbs found by research company Digital Finance Analytics to be susceptible to high-risk criteria similar to that listed by Mr Gall.
High-risk postcodes in New South Wales were named by Digital Finance Analytics principal Martin North as:
- Blackville, Caroona, Colly Blue, Pine Ridge, Quirindi, Spring Ridge and Wallabadah (2343)
- Greta (2334)
- Riverstone (2765)
- Mount Annan (2567)
- Auburn (2144)
- Blaxland (2774)
- Chipping Norton (2170)
- Berala (2141)
- Bass Hill (2197)
High-risk postcodes in Victoria were listed as:
- Aberfeldie, Essendon and Essendon West (3040)
- Gladstone Park, Gowanbrae and Tullamarine (3043)
- Pascoe Vale (3044)
- Belgrave and Tecoma (3160)
- Mount Evelyn (3796)
- Endeavour Hills (3802)
- Berwick and Harkaway (3806)