http://www.theaustralian.news.com.au/common/story_page/0,5744,9161410%255E25658,00.html
I thought an interesting section of the article was this:
Under the banks’ tough line on lending, apartments and some outer-suburban houses are being valued by the banks at about 80 per cent of their cost to buyers.
The banks are then lending just 70 per cent of the lower valuation, which means would-be buyers will be forced to find deposits of more than 40 per cent of the cost of the property.
“I don’t think the banks realise the impact that this sudden change of lending policy will have on the entire residential real estate market,” Mr Triguboff said yesterday.
“Two years ago they were prepared to lend 120 per cent of the value of units because they were rising in value.
“Now they will only lend about 50 per cent.”
How are people supposed to pull together a 40%-50% deposit on a $400k unit? Most of these new apartments are about that. 160k-200k deposit? AAARGH! [ohno2]
kay henry
Hi Kay,
hate to say it, but if the banks dont get more friendly with there lending criteria…
…the next generation of home buyers will find it much harder… to ever own their own home
…. and that wrapping and leasing will become a more frequent, and a way of accessing in purchasing your new or first home…
Cheers,
sisWell, sis, Meriton is offering vendor finance at comparable rates to those who probably cant get traditoinal finance with the banks. The problem here is that they have to refinance after two years, and given that they probably won’t have paid out any principle by then, the owners will be back to square one and may not be able to refinance. What happens then is anyone’s guess- Meriton buys it back from them for a song perhaps?
kay henry
Another article by Gottliebsen which “adds value” to the first one I posted.
http://www.theaustralian.news.com.au/common/story_page/0,5744,9171997%255E16946,00.html
kay henry
>>or settlements where buyers who paid 10 per cent deposit are now walking away.<<
Just be aware that walking away leaving 10% deposit behind doesn’t mean one cannot be sued for further damages.
Pisces
Listen to the banks.
If they feel East Coast apartments are that risky – why would an investor buy one!
If the prices drop however that’s a different matter….
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