Property

Commonwealth Bank: coal seam gas makes property ‘unacceptable’ as loan security

Australia’s has declared a Queensland with coal seam wells “unacceptable” as for residential lending, that ’s gasfields to their.

Queensland (QGC), which owns the wells Chinchilla acreage, has insisted that now that host its infrastructure have had their values negatively affected.

A letter from the Commonwealth, Australia, the presence of wells 240-hectare, , given for refusing the ’ for a $500,000 bridging.

The “fails the ’s lending ” the Chinchilla “unacceptable” as, being owned or blemishes and a tax bracket.

“ Valuation has coal seam wells land, making unacceptable for residential lending,” the.

Commonwealth Bank: coal seam gas makes property 'unacceptable' as loan security
Commonwealth Bank: coal seam gas makes property ‘unacceptable’ as loan security

The then QGC if the, refused.’I with the that farmers are powerless to refuse to coal seam ‘Sarah Ciesiolka“QGC does the that its infrastructure has had an of, or any QGC infrastructure,” a letter from its landholder relationships.“QGC has no direct to the of rural upon which are Surat Basin.”The ’s letter that “in QGC’s, a for finance declined for of the proposed as ”.In a Commonwealth Australia it “, profiles and serviceability” assessing.“In, we require a valuation to with out of the and to our lending,” it.

Mark McGovern, a rural economics from the Queensland of ’s of, economics and finance, the case of the.If the with wells as for a bridging, it lends to, McGovern.“ In as a resident wouldn’t meet the of the Commonwealth,” he.The, who, he and his had “ prisoners in our ”.The to,“’t it, ’t lend it. It’s to us,” he.His she “ropeable” on of the rejection after QGC had given public assurances its values.QGC to pay for a valuation of the, couple already had, one from the overturned its pre-approval of the.The Chinchilla their the that of Queensland’s gasfields, to refuse, “the guinea pigs” for a banned in Victoria and strongly resisted in NSW.Anti-gas industry activists, a local property agency manager and the president of the Real Estate Institute of Queensland (REIQ) all told Guardian Australia it was the first case they had heard of a bank refusing to lend because of gas wells on a property.Guardian Australia asked the Commonwealth Bank, Westpac, ANZ and National Australia Bank if gas wells now represented a black mark under their lending criteria.A spokeswoman for Westpac said the bank dealt with properties “over a certain size” within its business/agricultural division, where “different lending principles [to residential loans] would apply”.

The Commonwealth Bank said in a statement that every loan application was assessed on a case-by-case basis and it did “not have a policy of excluding coal seam gas wells as acceptable security in our regional and agribusiness banking.”

ANZ and NAB did not respond.

The REIQ president, Antonia Mercorella, said it was concerning if the case represented “the start of a new trend where lending institutions were suddenly deciding they were not prepared to loan money to people wanting to buy these properties”.“We know that in regional Queensland there’s a number of properties that this is going to create issues for,” she said.“If they’re applying a blanket rule where they’re not going to give a loan to anyone who has these on their property, then that’s obviously concerning, because it would make it very difficult for those property owners to sell their property.

 

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“There’s not too many buyers out there who are cashed up and able to buy without obtaining finance of the purchase.”Lock The Gate organiser Phil Laird said it was the first known case of “something we have been concerned about for a long time … flat out whether a bank will lend money based on your security”.

“It feeds into a story of people who are in the gasfields and who are trapped,” he said.“It’s going to make it very difficult for that guy to find another bank and what’s more, it’s going to make it difficult for a lot of people in similar circumstances to find someone and it’s going to cast a pall over their situation.“There’s a lot of reasons why people need to move and change their property holdings and when some other party who’s been imposed on top of you starts to dictate the way in which you can conduct your life, your lifestyle, your succession planning, it becomes a real problem.“And no one’s recognising this.”Laird said the support underpinning the Queensland gas industry represented “a government-sponsored model to transfer risk on to the landholder”.“There’s something fundamentally wrong about this. If you did this to BHP, Lend Lease or other large property holders, there would be hell to pay.”

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