The nation’s biggest bank is expected to curb its lending to buyers of undeveloped lots, in a move that will put even more pressure on the supply of housing.

The Australian Financial Review reported on Monday that the Commonwealth Bank is planning to delay the approval of loans to buyers of lots until the land is ready for development.

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If that became the policy of all banks, it would mean housing developers would have to invest in power and water infrastructure without any guarantee of buyers.

The news comes ahead of the bank’s annual report, due to be released on Wednesday, which is expected to coincide with a major capital raising, tipped to be in the range of $5 billion.

Both the capital raising and the tighter lending policy are a response to strict new capital requirements.

But CBA said no decision had been made about how it would respond to the call by the Australian Prudential Regulation Authority.

“CBA continues to work on a number of options for managing capital but no decision has been made,” the bank said on Monday.

– with AAP