Aussie home market cooling as banks tighten reins

Sydney

NICK Hart bought four homes in Adelaide in less than two years, and was getting ready to make an offer for a fifth, when a regulator-inspired move to cool the sizzling Australian property market spoiled his plans.

"I went to my bank for my next home loan and their response was eligibility assessments have changed, and they can't lend more to me just yet," said the 37-year-old sales manager at a software services firm. Mr Hart said the bank told him his existing loans, equivalent to 93 per cent of the value of his A$1.8 million (S$1.8 million) properties, need to be reduced before he can borrow any more.

Last month, Australian banks raised interest rates for property investors and introduced tougher loan-to-value standards in response to a move by regulators to rein in the riskier corners of the country's house price boom. With interest rates stuck at record lows due to the slowdown in the wider economy, the central bank and the Australia…