Home-loan lender’s decision to amend their lending rules to conform with the Australian Prudential Regulation Authority’s new guidelines has helped boost confidence. Property buyers are slowly returning to the housing market.

Sharon Xie, credit supervisor at Home Loan Experts stated that changes in serviceability and affordability buffers have increased the amount property buyers can borrow upto 20%.

The new guidelines allow a couple earning $200,000 annually to be eligible for an additional $115 790. This will increase their borrowing capacity by as much as $1.48m.

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Xie said that borrowers must still meet mortgage providers’ lending criteria to be eligible for a loan.

Below is a table based upon the combined annual incomes of Australian couples.

Maximum Borrowing power with Combined Income

Combined Income

Borrowing power


Before you make any changes

After modifications

























Source: Home Loan Specialists

Banks still have strict lending policies, so loans may take some time to approve. The Australian Financial Review spoke to her about how they review each loan application and the transactions and credit card statements of applicants to determine the household’s spending habits.

According to the Australian Bureau of Statistics in May, 29% of home loan applications were made by owner-occupiers. Recent market developments such as the back-to-back rate cuts, loosening lending regulations and the imminent implementation the First Home Loan deposit Scheme are expected to keep the strong participation of first-homebuyers.

Many suburbs located at the top of the housing market will benefit from changes to lending rules. These areas were hit by the downturn’s peak.

People who are able to get a mortgage can now borrow more because they have been able to remove serviceability limits and adjust to serviceability limits. They also have the option to change to a buffer of 2.5%. Cameron Kusher is a CoreLogic senior analyst and researcher who stated that homeowners may be interested in purchasing if they are looking to improve their homes.

As property buyers continue driving demand for housing upwards, experts predict significant price increases.

Below is a table showing the top suburbs that will experience strong price growth over the next three years.

The three-year growth projections for the top suburbs


Median home value

Projected Price Gains

Deakin (ACT).



Unley Park, SA



New Farm, QLD



Sandy Bay, TAS



Toorak (VIC).



Deepdene VIC



Middle Park, VIC



Peppermint Grove, WA



Point Piper (NSW)



Manly, NSW



Mosman (NSW).



Wollstonecraft NSW



CoreLogic, Home Loan experts