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A very long time ago (pre GFC) I financed a 22sqm apartment with the CBA at 80% LVR, another one at 70% with the NAB. I'm not sure what's available in today's market, but that's where I'd start looking. I've heard of a few lenders willing to fund below 40sqm at 60%. You'd be doing well to...

For the reasons you've already outlined, I'd be walking away from it. From a lending perspective it's difficult to finance an apartment under 50sqm but reasonable achievable. Below 40sqm is almost impossible, the best case scenario is you could borrow 80% against it, but other lenders (of...