And as I've said before, it would be worth asking the bank for a direct answer. And then finding out how long you need to hold the gift for.
Doesn't the gift need to be certified? That means its a gift, no payback liability for the bank to worry about. As good as cash.
The point I'm making is that the bank knows (and they will work out if it isn't clear) that John in this case, hasn't saved that money. So they will be assessing the application based on the money he has saved.
I don't recall the certification process, I vaguely recall a gift couldn't be anymore than 10% of the deposit. But this may have changed. It is still not clear how much John is putting in, and he may not want to disclose that. I know some have argued that the money is now his and he can do what he wants with it, I'm not trying to be argumentative, but the bank I worked for didn't view gifts the same way.
If the house he is looking to buy is $500k, then I'm guessing the bank will want to see at least $100k (owner occupied) saved by John to go towards the application.
My sister was gifted 45% of her deposit from my parents and scraped above the 20% requirement and it was approved so it must be more than 10% :)