Im generally not good at explaining things, so here goes.
If a bank has significant interest in real estate and the scale is sliding down (crash)
Then depending on what you do for a living will depend on wether the bank will loan to you as per their policy. (Set by the insurance company)
Banks to your point want to lend, the things that hold them back are insurance providers or dua's (designated underwriting authorities).
To you point, banks will lend to safe bets or people that are well off. (The poor are disadvantaged here as they:
A. Dont get the discounts on products even if same bank.
B. Take portions of their income i.e 50-80% depending on what you do.
C. Dont meet related qualifiing criteria.
They also take into account other assets such as super, paid off car, boat etc it they even have that much. To shore up an application.
Then there is their deposit size % wise also taken into account.
Now given all types of scenarios as a lender if im looking to lend someone money with property prices coming down, the above mentioned comes into play.
Most of the people that have to sell usually due to income not coming in (most likely) are forced to sell, (probably shouldnt have been given loan in 1st place but thats another storey).
Banks will not lend to certain parties that dont seem a strong case and are seen as weak.
The thing that help people get loan is signicant cash deposits to enable them to have a low lvr loan. (In the banks eyes this is seen as lower risk)
Banks have certain places that they are happy to loan money too and wont lend too.
There is alot that goes into it.
Hope i have explaied this well enough that others can follow.
The general 20% deposit might not be enough for a lender to satify the risk.
