Loan applications rise despite lending difficulties

They entered into contracts months ago, the markets have moved and they are being forced to settle, says Martin Brennan, Gold Band Finance chief executive.

A combination of factors have led to this situation, he says. Interest rates went up, property prices went down.

“In other words, the house bought for say $10, is now worth $8, which obviously leads to impairment. Those investors are staring down a loss of value and an increase in funding costs. In a lot of cases, they can’t get funding because the asset values have gone down.

“It's a challenge. A lot of people have to settle on them and are selling them straight away. Some will sell for a loss. It depends on the circumstances.”