The 87 blacklist suburbs when it comes to Citi apartment lending

Citi has imposed new lending conditions fearing high density "blackspots" face a surge in approvals.

Buyers in nearly 90 postcodes will require deposits of up to 35 per cent.

Investors also face tougher terms for cash-out loans, which enable a borrower to draw-down a property's equity, according to an update sent to the bank's network of mortgage brokers, obtained by The Australian Financial Review.

The black list is similar to previous lists of high density apartment inner city suburbs, but expands particularly in the western suburbs of Sydney and south-east suburbs of Melbourne.

The global bank only has a small mortgage book in Australia but does have a high profile with offshore Asian investors.

Citi's analysts are warning the 20 per cent rise in private apartment approvals during June will increase the threat of over-supply as construction is completed.

"The surge in approvals was heavily concentrated in Sydney, which is surprising given the tightening of lending standards and rise in lending to investors and interest-only occupiers," according to the bank's analysis.