Real estate firms to penalise banks

Press, 6 March 1984, Page 27

Real estate firms to penalise banks

PA Napier Top officers in the Real Estate Institute disappointed at the low level of lending by the four main trading banks have recommended members hit back by transferring funds to trustee banks.

The move, if accepted by real estate firms, could cost the trading banks about $7 million a year in Napier and Hastings alone. The recommendation that members consider shifting their trust accounts from the trading banks to the trustee banks was made at the week-end at a meeting of the 14 district presidents

of the NZ Real Estate Institute.

“In the past we have always put our deposits in banks,” said the Hawke’s Bay branch president, Mr Alistair Donaldson.

"But if they are not going to help, shouldn’t we be moving our money into trustee banks?” Mr Donaldson said most of the mortgage finance being made available was now coming from the trustee banks. The funds the institute is talking about are the 10 per cent deposit, held by the real estate firms from the signing of the contract until settlement of a property.

Those funds are put into short-term trust accounts at the trading banks — NZ, BNZ, Westpac and National. In Napier and Hastings last year, urban house sales alone accounted for more than $6.8 million in deposits. “We are talking about large amounts of money.

“We were concerned and disappointed at the lack of support (for mortgage finance) from the trading banks,” Mr Donaldson said.

He said the move was only a recommendation to members. “It’s an individual thing. Licensees have the right to put money where they wish.”