In the midst of the talk on possible interventions, it's worth to take another look at the financing available in Australia.. With that perspective, you may think that Australia mortgages for offshore foreigners are already strict compared to the high 95% LTV for residents.
How does 95% LTV stack up against others?
Residents qualify up to 95% LTV while Permanent Residents can try up to 90%. Onshore foreigners who are residing and working in Australia can obtain between 80%-90%. Offshore foreigners who reside and work outside Australia qualify for maximum 70% LTV.
95% is a very high loan-to-value ratio with just 5% downpayment. first time home buyers find 95% a comfortable LTV and will be unhappy if it goes lower. On the other hand, this seemingly lax lending critieria is fuelling loans for investment properties by residents. With the varying LT.V for different applicants statuses, it's perhaps fair to reason that offshore foreigners would not be an appropriate target (for now) if measures are implemented.
The Real Estate Institute of New South Wales recently weighed in on the hot property market. They commented that 95% LTV is dangerously high and also expressed their disappointment at Reserve Bank of Australia's property warnings.
Since 2015, Australia onshore banks have mostly withdrawn lending to non-residents. We continue to be able to offer financing from Singapore and Australia banks and private lenders.