Just when you thought you had enough money saved for a deposit for your Sydney home loan, the lender asks for 20% deposit, rather than the 5% or 10% you originally thought.
Some borrowers will now have to fork out as much as 30% to secure a mortgage in one of the 600 suburbs and towns on NAB’s blacklist. In 2015, NAB identified high-risk suburbs where property prices were growing at a faster rate than wages or there was a major oversupply of properties.
NAB has recently updated the list and buyers planning on purchasing in those Sydney suburbs will now have to reassess their deposit requirements.
High-risk Sydney suburbs requiring 20% deposit with NAB
- 2000 Barangaroo, Dawes Point, Haymarket, Millers Point, Sydney, The Rocks NSW
- 2008 Chippendale, Darlington NSW
- 2017 Waterloo, Zetland NSW
- 2019 Banksmeadow, Botany NSW
- 2037 Forest Lodge, Glebe NSW
- 2067 Chatswood NSW
- 2112 Denistone East, Putney, Ryde NSW
- 2118 Carlingford NSW
- 2127 Newington, Sydney Olympic Park, Wentworth Point NSW
- 2140 Homebush NSW
- 2141 Berala, Lidcombe, Rookwood NSW
- 2142 Camellia, Clyde, Granville, Holroyd, Rosehill NSW
- 2144 Auburn NSW
- 2146 Toongabbie NSW
- 2150 Harris Park, Parramatta
- 2153 Balkham Hills, Bella Vista, Winston Hills NSW
- 2166 Cabramatta, Canley Vale, Canley Heights, Lansvale NSW
- 2168 Ashcroft, Busby, Cartwright, Green Valley, Heckenberg, Hinchinbrook, Miller, Sadleir
- 2194 Campsie NSW
- 2195 Lakemba, Wiley Park NSW
- 2199 Yagoona NSW
- 2205 Arncliffe, Turrella, Wolli Creek NSW
- 2208 Kingsgrove NSW
- 2209 Beverly Hills, Narwee NSW
- 2210 Lugarno, Peakhurst, Riverwood NSW
- 2211 Padstow NSW
- 2220 Hurstville NSW
- 2222 Penshurst NSW
- 2566 Varroville, Bow Bowing, Minto, Raby, St Andrews NSW
- 2767 Bungarribee, Doonside, Woodcroft NSW
- 2769 The Ponds NSW
Some Western Australia and Queensland suburbs received the toughest credit changes with several suburbs requiring a massive 30% deposit. Luckily, Sydney suburbs escaped this requirement.
Pre-approved buyers at the mercy of new credit policy
As with any lender’s credit changes, once a new policy is introduced the application is assessed in consideration of the new credit policy. This possess a serious problem for those off-the-plan buyers or those with pre-approval status who have already exchanged on a property. If the buyer original exchanged on the property using a 5% or 10% deposit, but under the credit changes the lender will now only lend up to 80% of the loan, the buyer needs to come up with remaining cash. We will start to see buyer’s losing their deposit because they can’t complete.
Bad news for sellers
If you’ve recently listed your property for sale in one of the blacklisted suburbs, you’ll need to consider whether now is the right time to sell given that some borrowers will need larger deposits. Whilst auction rates are holding well in Sydney, sellers may see lower levels of interest from buyers due to these credit changes. It’s also worth discussing with your real estate agent if it’s beneficial to extend the cooling-off period to provide buyers with more time to secure their home loan from alternate banks and lenders.
Not all lenders have suburb restrictions
While NAB are leading the way with the high-risk Sydney suburbs classifications, there are both major banks and 2nd tier lenders with more flexible lending criteria. Mortgage Broker, Mint Equity has access to over 40 lenders with 100’s of products and can provide buyers with alternative home loan options.