Generally inner city apartments are considered by banks to be any unit in a block located in a particular postcode range. They are higher density units and are generally more populated. This being the case, lifts, balconies, and beautiful vistas are often common to these apartment units.
However, there is no set criteria that all banks follow before an apartment unit is considered to be one that is in the inner city. Each bank has a different description, and a different set of apartments that they define and consider to be inner city apartments.
In general a first home buyer can acquire a 95% of the property value of the inner city apartment. Investors get the same rate of 95%. However when it comes to low documentary loans, only 80% of the property value is allowed to be given out as a loan.
Another criteria that helps banks determine if an apartment is inner city or not is the postal code. Various areas are considered to be high density areas.
Banks see these types of apartments as a high risk and are thus adhere to very strict criteria before allowing any possible loans. This is because that these inner city apartment units tend to fluctuate in price more. This fluctuation in price is what the banks fear, and is the reason for their being conservative.
Hi, nice and informative post, thank you very much for putting the points in a plain and easy way. Once again thank you.