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Westpac NZ is helping would-be homebuyers make informed decisions by sharing natural hazard risk information about individual properties.
Westpac has invested in climate data, supplied by NZ-based climate specialists ClimSystems Powered by SLR, and will provide home lending applicants with a short Westpac Natural Hazard Risk Insights report based on the same data it considers in lending decisions.
Sarah Hearn, Westpac NZ Managing Director Product, Sustainability & Marketing, says the bank is working to build awareness about natural hazard risks and what they might mean for homeowners, so they can prepare for potential future impacts.
“Buying a home is the single biggest financial decision of most people’s lives. We want to make sure customers have relevant information available about a property they’re interested in, including the risk of that property experiencing damage from natural hazards like flooding or slips,” Ms Hearn says.
“It’s not news to anyone that flooding and slips are happening more often in New Zealand – we’re experiencing severe storms more frequently, and those storms can have a devastating impact on people’s homes and livelihoods.
“Providing this information will help people understand how flooding or landslips could impact a property they’re interested in. They can then make informed purchasing decisions, or consider how they may want to protect the property.
“We want to support our customers to make good decisions. Providing them with the same insights we receive helps ensure they have the same information we do when making their decisions.
“We’re being careful and deliberate in the way we factor natural hazard risks into our lending decisions, with a focus on helping customers understand what it means for them.
“We are not moving to risk-based pricing and we don’t expect to be declining applications solely on the basis of this risk. However, in a small number of cases, it may mean the amount we’re comfortable lending on an at-risk property is less than it may previously have been.”
A survey of 529 people, commissioned by Westpac NZ and conducted on research platform Ideally in June, found 90% of New Zealanders think it’s extremely or very important to have information about potential natural hazard risk impacts to their own property or a property they’re interested in.
However, the survey found 14% of current homeowners and 32% of those renting don’t feel confident about how or where to find this kind of information.
“Customers tell us they want more information. We already recommend customers do their due diligence on natural hazard risk, but providing these insights during lending discussions makes it easier for people to factor it into their decision-making.”
Information about property natural hazard risks is already publicly available from a range of sources, including LIM reports, local councils, insurers, and the Natural Hazards Commission.
Since July this year, Westpac customers applying for home insurance through Westpac One online banking have been able to access information about the natural hazard risk information Tower Insurance has for a particular property.
“The feedback we’ve had from customers applying for insurance is that they find it helpful to have access to this kind of information,” Ms Hearn says.
Westpac NZ is the only New Zealand bank to provide interest-free lending to help home-owners improve a home’s resilience to natural hazard events. This means Westpac mortgage customers can use a Greater Choices home loan top-up to invest in things such as improving site drainage or raising outdoor appliances above potential flood levels.