At least one major bank says it “still has an appetite” to lend in Katherine despite the fears over PFAS contamination.
The ANZ Bank, while agreeing property values may have fallen, says PFAS is in itself not a reason to decline a loan.
Indeed, cheaper homes might present an opportunity for first home buyers.
ANZ district manager Philip Brown said his bank was one of the major lenders for commercial and property loans in Katherine.
“We still have an appetite for lending there,” Mr Brown said.
He said the bank had “sensed” concern in Katherine whether the bank want to do business there or not.
“We haven’t changed our lending practices in town.”
In a 2017 report on the Tindal PFAS contamination, the Australian Property Institute recommended Katherine should be ranked a “3” or more probably a “4” on the five-tier credit system used by most banks.
Three is said to be a “good risk” while four was “above average credit risk”.
“It is recommended that each member detail their own risk rating in accord with their individual research, however, that at a minimum it should be a “3” but more probable a “4” or where PFAS has been identified as a specific concern then maybe a “5” is appropriate, however, the assigned risk rating is to be an individual Valuers responsibility,” the API report said.
“Whilst the values applied reflect the current sales, activity within the general area the prices could fluctuate suddenly depending on further investigation, publicity and buyer perception of proposed risks of individual properties,” the report said.
Mr Brown said the bank used its own valuers to determine property fluctuations in town but he was aware prices right across the NT had fallen.
He said they were looking at 3 and 4 rankings for Katherine, not fives.
Hundreds of Katherine residents have signed up for a class action against the Department of Defence claiming their property values have fallen as result of contamination from the Tindal RAAF Base.
Mr Brown said the impacts of PFAS were not just on health but also on property.
“There is still a reasonably healthy demand for loans in Katherine,” he said.
He agreed property sales “were not where they were two years ago”.
He said the NT Government’s first home buyers scheme was still encouraging people to enter the market, in Katherine as well.
If you want to buy or build a new home in the NT, you can apply for a First Home Owner Grant of up to $26,000.
Big stamp duty reductions are available on existing homes.
Mr Brown suggested a first home buyer had the time to allow the market to rebound and capitalise on their investment.