Say an Investor has a good income to service a loan... The investor has $50k (plus $$ for fees) in cash or collateral . Banks lend 95% so effectivley he can look at a Million dollar property...
The RBA changes the rules and puts a maximum of 90 lend.. this investor now can only look at a $500 k property... and if the RBA wants to tighten even more make maximum borrowing 80%... The same investor can only look at properties at $250k....
China did it... second property 50% deposit third no borrowing ...
