Banks tougher on inner-city units
Australia's banks and mortgage insurers have been tightening lending criteria for inner-city apartments over recent months as they look to reduce exposure, mortgage brokers say. Westpac has reduced its loan-to-value ratio from 80 per cent to 70 per cent for investment properties while ANZ has decreased its LVR from 70 per cent to 60 per cent. National Australia Bank has reviewed its lending policies on inner-city properties three times since 2001.
Mortgage Choice has noticed a “tighter focus” on areas such as the Docklands in Melbourne and Sydney's Ultimo. ANZ spokesman Paul Edwards said the bank has a “corporate aversion” to those areas although it was not avoiding particular postcodes but specific developments. The banks and other lenders such as Aussie Group also monitor apartment size. ANZ won't exceed an LVR of 60 per cent for small one-bedroom flats with floor areas of fewer than 50 square metres.