As the property market in Oz bursts forth with a last-minute flurry of first home buyers trying to snare their $14,000 grant, bad news seems to be looming for new borrowers.
Not only are banks getting tougher about how much deposit new borrowers must have saved, they are also reducing the amounts on offer.
Deutsche Bank has recently completed research by cold calling several banks and asking what the big banks would offer. They found:
- St George down from $455,000 to $400,000
- Westpac down $479,000 to $446,000
- ANZ down $485,000 to $439,000
- BankWest down $470,000 to $442,000
- Bendigo Bank down $430,000 to $420,000
- National Australia Bank down $310,000 to $290,000
- Commonwealth Bank remained steady at $420,000
- Suncorp remained steady at $450,000
- Bank of Queensland raised its maximum by $7000 to $425,000
This might seem like good news for common sense and prudency, but it could be bad news for property values which could well have priced in the "old" amounts people were able to borrow. When new buyers can't borrow as much, it seems logical that those "old" prices may not be able to achieve.
I guess it's lucky the properyt market is such a divergent beast and each area, suburb and home has different price gains or falls.
It will be interesting to see how this plays out - especially as interest rates rise.
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