What are inner city apartments?

Inner city apartments are generally defined by the banks as any unit in a block located in a particular postcode range, generally within the CBD of capital cities. They can often be referred to as high density units or CBD units and tend to have lifts, balconies and sought after views.

Different banks have different policies to define what an inner city unit is and so which lending policies will apply. In some cases a block of units must have at least 4 floors or 35 units in the complex to be defined as inner city apartments.

If the unit you are buying is defined by a bank as an inner city apartment then they may restrict the amount of money that you can borrow.

How much can you borrow?

First home buyer: 95% of the property value (restrictions apply).

Investor: 95% of the property value.

Low doc: 80% of the property value.

Discounts: Competitive professional package and basic loan discounts are available.

Note: Most lenders restrict the amount you can borrow quite significantly, often to 80% or less of the property value. In fact several lenders will not lend to first home buyers at all! That being said at least one of our lenders will approve up to 95% of the property value.

Which postcodes are considered to be “High Density”?

These vary from lender to lender, however as a general rule the following postcodes are considered to be a high risk and are assessed by lenders under their inner city policy:

NSW: 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2010, 2011, 2017, 2077, 2138, 2140, 2205.

VIC: 3000, 3001, 3004, 3005, 3006, 3007, 3008, 3009.

QLD: 4000, 4001, 4002, 4003, 4004.

SA: 5000, 5001, 5002, 5003, 5004, 5005.

WA: 6000, 6001, 6002, 6003, 6004, 6005.

TAS: 7000.

NT: 800.

Note that there are variations on these postcodes, please enquire online and one of our mortgage brokers can let you know what restrictions apply for your unit.

Why are the banks so conservative?

In the past there have been periods when the CBDs of several Australian cities were flooded with cheap units. As a result of new developments being constructed, inner city apartments tend to fluctuate in price more often than other types of properties as supply and demand change. Because of these price fluctuations, banks see financing high density units as a higher risk.

Look out for units that are smaller than 50 m2 as only a handful of banks can finance them with a mortgage. Small units that are around 25 m2 can be financed although lending restrictions may apply.