The Friendly Bay Islander - Dec 01, 2013 22:12

Bid For Full Island Bank Branch

A move is being made to have a full branch of a bank located on the Bay Islands.

Currently, the banking services available are bank agencies on behalf of the Bendigo Bank at Macleay Island Data and at the Russell Island Pharmacy.

And because there is no full bank branch on the islands, the president of the Bay Islands Chamber of Commerce believes the islands are 'missing out'.

"There is no doubt the islands are being held back by the policies of some banks," Ian Goddard told The Friendly Bay Islander.

And he has been supported in his claims by the island real estate industry and Redland City Council Division 5 representative, Cr Mark Edwards, himself a former banker.

"Progress and development on the Bay Islands is being stifled because bank attitude to the islands," Cr Edwards.

He explained:
• Not all banks will loan for housing and land constructions and purchases on island properties;
• The islands are 'penalised' because insurance houses will not provide mortgage insurance to island borrowers;
It is believed that only three banks will actually provide loans to the islands, the Bendigo Bank, the Heritage Bank and Banana Coast Building Society.

None of the 'Big Four' will provide regulation loans for island land and house purchases or for home construction, although some will to favoured clients.

The unavailability of mortgage insurance means that island land and home purchasers have to come up with a minimum 20% deposit compared to 10% for home purchasers elsewhere in Australia where mortgage insurance is available.

Ian Goddard also heads up KCW Constructions, heavily involved in island home building.
"It is extremely frustrating.

"In recent days a number of home construction jobs have fallen through because of the position of the banks.

"I also know from several real estate offices on the islands that they have lost land sales because of the current situation with the banks," Ian Goddard said.

Cr Mark Edwards says having a full bank office on the islands could go a long way to eventually changing the perception of the islands as a bad financial investment for banks.

With this in mind, the councillor and Ian Goddard recently met with representatives of the Bendigo Bank with a view to encouraging them to establish a full bank branch on the islands.

Further talks have been scheduled and Ian Goddard and Cr Edwards are hopeful of a positive outcome.

"The quickest way to turn an economy around is to give the building industry a shot in the arm," Cr Edwards added.

A survey of island real estate offices has revealed that since the Federal Election the number of sales of island land and homes has increased dramatically, although some have been stifled by the bank loan situation.

Macleay Island resident Graham Holly has been frustrated by the banks and their position in regard to the islands that he is investigating a system that might be introduced involving vendor finance to help boost island land and home sales.

"If a vendor leaves finance in a property for a period of time, it allows a purchaser with a lesser deposit to pursue other options until a bank loan can be put in place," he said.

Graham is running an advertisement on this page seeking calls and information from interested parties.