Invest
Bad news for overcommitted property investors
Lending watchdog APRA has today announced extra measures to monitor Australian mortgage lending, increasing pressure on stretched property investors in “an environment of heightened risks”.
Bad news for overcommitted property investors
Lending watchdog APRA has today announced extra measures to monitor Australian mortgage lending, increasing pressure on stretched property investors in “an environment of heightened risks”.
APRA advised all authorised deposit-taking institutions (ADIs) to limit the flow of new interest-only lending to 30 per cent of total new residential mortgages and limit investor lending to remain under 10 per cent growth.
In addition, APRA said it expects lenders to ensure their interest rates, net incomes buffers and other serviceability metrics are appropriate, as well as restrain higher risk lending growth, such as loans with high loan-to-income rations, high loan-to-value ratios (LVRs) and extra-long terms.
“APRA expects ADIs to target a level of investor lending growth that allows them to comfortably manage normal monthly volatility in lending flows without exceeding this benchmark level,” APRA chairman Wayne Byres said.
“APRA views a higher proportion of interest-only lending in the current environment to be indicative of a higher risk profile. We will therefore be monitoring the share of interest-only lending within total new mortgage lending for each ADI and will consider the need to impose additional requirements on an ADI when the proportion of new lending on interest-only terms exceeds 30 per cent of total new mortgage lending,” Mr Byres said.
Loan providers will also be required to place internal limits on interest-only LVRs exceeding 80 per cent and be able to justify any exceeding 90 per cent.
Today’s measures build on those introduced at the end of 2014 aimed at improving the quality of new mortgage lending, and particularly moderating investor lending.
Following those announcements three years ago, auction rates fell to 50 per cent and price gains slowed.
Amid extraordinary price growth, the new string of measures may do the same to quell some of Australia’s heated property markets, especially in Sydney and Melbourne.
“This increased scrutiny has been in response to an environment of heightened risks, reflected in an environment of high housing prices, high and rising household indebtedness, subdued household income growth, historically low interest rates and strong competitive pressures,” APRA said in a statement.
“Given this environment, APRA has concluded that further steps to address risks that continue to build within the mortgage lending market are appropriate.”
RELATED ARTICLES
-
Trust, technology and triage: what NSW’s ‘name and shame’ signals for real estate governance
-
Vacancy is rising, demand is resilient: A case study in defending yield as Australia’s rental cycle rebalances
-
Don’t lose the deposit: A case study in stopping real estate payment fraud — and the ROI for doing it
Property
Trust, technology and triage: what NSW’s ‘name and shame’ signals for real estate governance
NSW’s latest enforcement action on real estate trust accounts isn’t a one-off embarrassment; it’s a stress test of sector governance. With licences suspended and penalties applied, the message is ...Read more
Property
Vacancy is rising, demand is resilient: A case study in defending yield as Australia’s rental cycle rebalances
After a blistering run, Australia’s rental market is loosening at the edges. Vacancy is edging up off historic lows, rent inflation is set to moderate into 2026, yet underlying demand remains ...Read more
Property
Don’t lose the deposit: A case study in stopping real estate payment fraud — and the ROI for doing it
Deposit redirection scams are quietly eroding buyer savings and agency reputations in Australia’s property market. This case study unpacks how a mid-tier real estate group redesigned its settlement ...Read more
Property
The $12m threshold: Why portfolio value, not property count, now defines Australia’s investor elite
The old yardstick of six properties as shorthand for investment success has been overtaken by a harsher reality: in today’s market, elite status is defined by balance-sheet strength, not asset countRead more
Property
From intuition to instrumentation: How a "two-stakeholder" sales playbook lifted close rates and cut cycle times
High-stakes consumer purchases are increasingly joint decisions. When one partner is under-served, deals stall. This case study follows an Australian real estate group that rebuilt its sales motion ...Read more
Property
Selling in 2025: How to spot bad agents fast—and build an ROI-first vendor playbook
In Australia’s property market, choosing the wrong listing agent isn’t just inconvenient—it’s a textbook principal–agent failure that can wipe tens of thousands off your sale outcomeRead more
Property
Selling in 2026: How to de‑risk your agent choice and protect tens of thousands at settlement
Choosing the wrong selling agent isn’t just an inconvenience — it’s a balance‑sheet risk. In a market where digital discovery is concentrated and AI is recasting how listings are priced and promoted, ...Read more
Property
Rate resilience in Australian housing: why scarce supply is overpowering monetary tightening
Australia’s housing market is defying higher borrowing costs because the binding constraint isn’t demand—it’s supply. Brokers report persistent buyer competition and investor repositioning, while ...Read more
Property
Trust, technology and triage: what NSW’s ‘name and shame’ signals for real estate governance
NSW’s latest enforcement action on real estate trust accounts isn’t a one-off embarrassment; it’s a stress test of sector governance. With licences suspended and penalties applied, the message is ...Read more
Property
Vacancy is rising, demand is resilient: A case study in defending yield as Australia’s rental cycle rebalances
After a blistering run, Australia’s rental market is loosening at the edges. Vacancy is edging up off historic lows, rent inflation is set to moderate into 2026, yet underlying demand remains ...Read more
Property
Don’t lose the deposit: A case study in stopping real estate payment fraud — and the ROI for doing it
Deposit redirection scams are quietly eroding buyer savings and agency reputations in Australia’s property market. This case study unpacks how a mid-tier real estate group redesigned its settlement ...Read more
Property
The $12m threshold: Why portfolio value, not property count, now defines Australia’s investor elite
The old yardstick of six properties as shorthand for investment success has been overtaken by a harsher reality: in today’s market, elite status is defined by balance-sheet strength, not asset countRead more
Property
From intuition to instrumentation: How a "two-stakeholder" sales playbook lifted close rates and cut cycle times
High-stakes consumer purchases are increasingly joint decisions. When one partner is under-served, deals stall. This case study follows an Australian real estate group that rebuilt its sales motion ...Read more
Property
Selling in 2025: How to spot bad agents fast—and build an ROI-first vendor playbook
In Australia’s property market, choosing the wrong listing agent isn’t just inconvenient—it’s a textbook principal–agent failure that can wipe tens of thousands off your sale outcomeRead more
Property
Selling in 2026: How to de‑risk your agent choice and protect tens of thousands at settlement
Choosing the wrong selling agent isn’t just an inconvenience — it’s a balance‑sheet risk. In a market where digital discovery is concentrated and AI is recasting how listings are priced and promoted, ...Read more
Property
Rate resilience in Australian housing: why scarce supply is overpowering monetary tightening
Australia’s housing market is defying higher borrowing costs because the binding constraint isn’t demand—it’s supply. Brokers report persistent buyer competition and investor repositioning, while ...Read more
