Australian Bank Starting to Axe No Deposit Loans
It’s going to be interesting as more and more banks tighten their lending policy and make it harder for people to borrow. In the article below, CBA is axing their no deposit loans. I think its important to interate that the Property market is “moved” by the ability to finance the asset (ie the property).
Reducing/tightening credit policies and rules will obviously make it harder for individuals, investors and of course businesses and large corporations to finance things. Which means people will fail the credit assessments and not be able to purchase (ie. reducting in the demand of property due to the inability to finance the asset)
So keep an eye out for other signs of tightening credit which will effect the economy and all other markets!
CBA axes no-deposit loans
Prospective homebuyers will find it hard to get no-deposit loans in the wake of the global credit crisis.The Commonwealth Bank of Australia has banned no-deposit loans and the ANZ has tightened eligibility requirements.
JPMorgan banking analyst Brian Johnson says stricter lending standards are here to stay.
”The era of getting very easy credit to buy a house is over,” he told ABC Radio, adding the move could have negative implications for house prices.
Aussie Home Loans boss John Symond says the change signals a return to sensible lending practices.
”Banks have got to have prudent lending,” he told ABC Radio.
”People buying home in Australia with little or no deposit is flawed process.”
