The National Australia Bank has joined the three other big Australian banks to curb lending to foreign property buyers without domestic incomes.  It joins Commonwealth Bank, ANZ, and Westpac in restricting foreign lending.

"We recently made changes to our policy for lending to foreign applicants, which came into effect on Saturday 18 June.  NAB has limited appetite for this segment, which comprises only a small percentage of NAB's lending book," a spokesman said.  "Under these changes, applicants will need to provide evidence of existing Australian income in order to be eligible for home lending application purposes."

NAB is last to cut back on such lending.  In April, ANZ began refusing applications with 100 percent foreign income sources, coinciding with a general tightening of paperwork.  Commonwealth Bank, the nation's biggest home lender, was next to withdraw loans to temporary Australian residents with foreign currency income.  Westpac was third in April, and NAB makes it a quartet.

The move appears to open up risks:  New foreign buyers could find it extremely difficult to get the required property finance, which could place immense pressure on apartment property developers as settlements come due; foreign investors might be driven to default when the times comes to pay for brand new off-the-plan apartments over the next year.