Incentives demonstrate the method in property madness

The tight supply is due to bank inaction, and poor cash returns are behind the price rise, but a correction will come, writes Karl Deeter.

When it comes to lending for investment properties our brokerage has seen a total collapse in activity in recent years. This is a theme common to many intermediaries.

The criteria have hardened, rates are generally in excess of 5 per cent - often closer to 6 per cent - and the deposit required starts from a base of 25 per cent of the purchase price.

While every bank keeps a suite of 'products' ...