Borrowing capacity of $800K reduced to $500K by banks: True or false?

Are Australian banks tightening their lending criteria and reducing prospective home buyers' borrowing capacity by up to 40 percent? How will this impact on Nepalis looking to buy their first home in cities like Sydney and Melbourne? Finance adviser Bishwas Bhattarai has this to say.

A composite image of the 'big four' banks Source: AAP