Source : Corelogic.
Banks in recent months have tightened their assessment criteria for borrowers particularly, investors.
Some of these key changes have been
- interest rate rise particularly for investment loans.
- borrowers must establish that they can service loans at interest rates up to 8 %p.a.on sensitivity analysis.
- Banks have been more prepared to adopt their own determinations of an acceptable minimal living expenses per month for a borrower.
This has impacted with a lower level of loan size approval for borrowers compared to before.
There has been a reduction in Sydney average house prices over the last 2 months ( Dec 1.2% and Nov 1.4%). 2016 may see further softness in both Sydney and Melbourne markets.
This can be expected to create better buying opportunities in the months ahead for those owner occupied buyers and investors who can meet Bank qualification for the loan amounts they will be seeking.