Australia Property

[BlueKelah]

Yup cut to 80% from 90%. Which is for local investors. 90% is too much to begin with, isn't it? And yup locals struggle to put up 20% Deposit.

Used to be 80% LVR very long time ago but over many years, max LVR has been loosened to 95% LVR, some investors even getting 97% LVR IO(interest only) loans.

imagine 100k deposit @ 90% LVR = 1mio loan to buy a property.
now 100k deposit @ 80% LVR = 500k to buy a property.

10% difference in LVR makes the loan half, so many properties will be suddenly unaffordable to buyers.

those local that bought 1mio apartment in Sydney/Melbourne off-the-plan with 100k deposit, if the project finishing later half of this year or next year, they need to suddenly find another 100k deposit to settle, otherwise bank won't be able to provide them the finance and no choice they will have to sell.

They may even copy Singapore and introduce something like the TDSR framework. Ang mo also not that stupid, won't let those Chinamen simply come in and goreng their market, just that they are slower to action than sg gov.