New data out today shows banks have officially put the brakes on risky home buyers as the value of small deposit loans hits a record low.
APRAโs quarterly property exposures statistics released today show that the value of new mortgages written in the March quarter with a loan-to-value ratio of more than 90 per cent have sunk to $5.79 billion โ the lowest value since the records began in 2008.
This represents just 6.67 per cent of all new loans approved in the March 2018 quarter and down 16 per cent year-on-year.
Todayโs statistics also confirmed the overall slump in housing finance, with all new residential loans written in the March quarter falling by $2.5 billion from a year ago.
RateCity data released this week also shows banks are limiting the number of low deposit products on the market. Less than one third of all home loans in the RateCity database now offer 95 per cent LVR loans down from 76 per cent three years ago.
RateCity spokesperson Sally Tindall said todayโs data was confirmation the market had fundamentally shifted.
โWhat weโre seeing now is the start of a credit crunch,โ she said.
โBanks are actively seeking out customers who are prepared to put a decent deposit on the table.
โIf you canโt come up with a 20 per cent deposit, be prepared to have lenders turn you away,โ she said.