Party calls on regulator to place 2014-era restrictions on investor lending growth
The Australian Greens have welcomed the Australian Prudential Regulation Authority (APRA)’s decision to place limits on high-risk home lending, but warned that the measures have not gone far enough to cool investors’ "stampede" of the housing market.
APRA on Thursday announced that from 1 February 2026, banks and other authorised deposit-taking institutions (ADIs) will only be able to lend up to 20% of new mortgages at a debt-to-to-income (DTI) ratio of six times or more.
While the limits impact both owner-occupiers and property investors, it’s the latter segment that will be most impacted by the measures.
“At this point, the signs of a build-up in risks are chiefly concentrated in high DTI lending, especially to investors,” said APRA chair John Lonsdale. “By activating a DTI limit now, APRA aims to pre-emptively contain risks building up from this type of lending and strengthen banking and household sector resilience.”
Greens spokesperson for finance, housing and homelessness Barbara Pocock (pictured) called the move “an important first step in limiting runaway investor lending that outcompetes first-home buyers”, but she warned that “it’s not enough” to rebalance the market.
“APRA must use all the tools in their toolbox to rein in investor lending that is exacerbating the housing affordability crisis,” said Pocock.
Pocock referred to measures placed by APRA in 2014 when the regulator put a 10% annual cap on investor loan growth in order to reduce vulnerabilities in the housing market. The measures were lifted in 2018.
Investor lending rocketed up by 20% year on year in the September 2025 quarter, while first-home buyer loans increased by just 2.3%.
“Investor lending is growing at an unsustainable pace, outstripping loans to owner-occupiers. First-home buyers are being priced out by investors at weekend auctions, house prices are surging, and the banks are profiting handsomely,” said Pocock.
She warned that the housing crisis is nearing a point “where it may be impossible to reverse without immediate, decisive action”.
“We urgently need to cool the overheated credit market for property investors. The Treasurer has the authority to issue directions to APRA and he should do so immediately,” Pocock added.
