Banks have also raised their interest rate buffers and increased their “genuine savings” requirements. Low-doc and non-conforming loans have become much harder to obtain.
This has seen a decline in the share of new owner-occupier housing loans with a LVR above 90 per cent, from a peak of 27 per cent in the March quarter 2009 to 17 per cent by the end of the year. The share of low-doc loans has declined to about 7 per cent.