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Home equity in city centres and other areas

Discussion in 'General Investing Discussion' started by harinivas, 28th Aug, 2010.

  1. harinivas

    harinivas New Member

    Joined:
    28th Aug, 2010
    Posts:
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    Location:
    sydney
    Folks,
    Remembered reading that units in or near the city CBD has less equity value when compared to units away. Also which one does bank prefer much for equity loan, one in high rise buildings or an individual house? Comments much appreciated
     
  2. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    I think you're confusing the bank's concern with small units (less than 50sqm) with equity, which is the monetary difference between what your property is worth and what you owe to the bank.

    I don't deal with high rise and small size units so I'm not familiar with what the banks prefer as security but I guess that if a lender had to choose between 2 types of security they'd choose the one with the higher land value.

    Also, from what I know you'll need a bigger deposit if you want to buy a tiny studio in a high rise apartment block but with a normal size unit (1-2bed?) you shouldn't have the same problem.

    Some banks could also be concerned with properties outside the major capital cities so if you intend to buy a property in the country always ask your lender what % of the purchase price they're willing to lend.

    I hope this helps.
     
  3. Billv

    Billv Getting there

    Joined:
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    Location:
    Sydney, NSW
    This is not true