Weak Property Prices Results in Tougher Lending Standards
Due to dip in Sydney and Melbourne property prices, the banks have made stricter lending standards for both investors and owner occupiers.
As per the data collected by one of the Australian Mortgage Broker named Home loan experts, A couple with combined income of $120,000 purchasing an investment property will have to make do with up to $80,000 less from a major bank than they would have had a year ago, and for owner occupiers, the maximum loan size for the same hypothetical couple buying a home to live in has fallen by up to $65,000.
In the past few months, these stricter lending standards by major banks, played a major role to control risky property market, as a result the property prices in Sydney and Melbourne have dipped in the December quarter.
Home loan experts also calculated that, the borrowing power or maximum loan amount for a couple earning $60,000 each, with two children.
If a comparison is made for lending figures of this year with the previous one, then it comes out to be:
For Commonwealth Bank – If one have got a $640,000 as a housing investment loan in last year then now he/she can have $560,000, which is $80,000 reduction.
For Westpac – If one have got a $645,000 as a housing investment loan in last year then now he/she can have $580,000 , which is $65,000 reduction.