Why have lenders changed loan policies?
1. GFC Global Financial Crisis has shown holes in the way some international lenders policies have created inflated prices in property. This created major losses for the lenders as they were increasing the values above the real values of properties.
2. Lenders research how defaulting loans are created and try to minimise these types of clients on their books. The GFC has created a lot of data, caused unemployment and affected money and share markets which put pressure on loans and property markets.
3. The banks are credit rationing as they do not have access to as many global money markets to obtain funds. This means they are picking and choosing lower risk cliental. Think about it if you were lending to a friend would you pick a friend who will definitely repay or might repay?
Why has Australia not been touched as badly as some other international markets?
Luckily Australian lenders have been very conservative. This has meant that most people taking loans are able to repay the loans even in bad times therefore they are not forced to sell properties at a time when it is hard for people to source funds which could cause a property market crash. As an Australian Lender I can not believe some of the policies in place with some of the international banks, some things are just common sense...
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