While APRA has announced new debt-to-income limits for banks, the Greens are urging the Treasurer to step in on investor lending, too.
On Thursday (27 November), the prudential regulator announced it would be bringing in a new speed limit for mortgages where debt is above, or equal to, six times income.
The limits for the banks will take effect for both owner-occupier and investor loans from 1 February 2026, as part of a pre-emptive move to contain “a build-up of housing-related vulnerabilities in the financial system”.
The move comes following an uptick in higher debt-to-income (DTI) lending, particularly for investor lending.
While APRA has so far stopped short of bringing in broader investor limits, it said it would “continue to assess carefully the evolving risk environment related to housing lending and will consider additional limits, including investor-specific limits, if macro-financial risks rise significantly or lending standards deteriorate”.
Responding to the move, the Australian Greens urged federal Treasurer Jim Chalmers to force APRA to cool the “ investors’ stampede of the housing market”.
The party said that the “massive spike” in investor lending was causing issues in the lending market, and called on the Treasurer to direct APRA to use all the available levers to curtail “runaway” investor lending.
Greens spokesperson for finance, housing and homelessness, Senator Barbara Pocock, commented that APRA’s mvoe on high DTI lending was “an important first step” but did not got far enough.
She said: “$40 billion has gone to investors in the last three months and APRA and Chalmers need to stop the tens of billions flowing to investors.
“APRA must use all the tools in their toolbox to rein in investor lending that is exacerbating the housing affordability crisis,” Pocock continued.
“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.
“This housing crisis is heading toward 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,” she said.
The Green spokesperson noted that APRA has previously intervened in investor lending (for example, bringing in speed limits for interest-only and investor lending in 2014 and 2017), adding that these measures led to “the greatest stabilisation of house prices in 30 years”.
Given house prices are at record-hgh levels, the Greens said APRA needed to “take that decision action again” and bring in additional investor curbs again.
“This market is rigged in favour of wealthy property investors, and you only need to look at the latest ABS data, which shows investor lending skyrocketing by 12.3 per cent over the year compared to only a 0.9 per cent increase for first-home buyer loan commitments for the same period.
“It’s out of control,” Senator Pocock said.
She flagged Westpac’s Housing Pulse data from September 2025, which revealed the major bank’s economics team believe house prices will prices will rise 6 per cent in the calendar year 2025 and an additional 9 per cent in 2026, which she said “would only worsen unless more pre-emptive action by APRA is taken”.
Investor lending limits would exacerbate 'intergenerational inequity': HIA
However, others have warned that lending limits could exacerbate inequities in wealth.
Tim Reardon, the chief economist of the Housing Industry Association (HIA), warned that many investors are those who cannot afford to purchase owner-occupier dwellings, and new lending limits would reduce investment in new and established housing, worsen intergenerational inequality, constrain competition, and ultimately undermine housing supply by imposing unnecessary, ill-timed restrictions on borrowers and banks.
He noted that investors were responsible for delivering 42 per cent of new detached homes in 2024/25 and play a critical role in solving Australia’s housing crisis.
“Investors have high LVR ratios because they typically have a deep and diverse set of investments, outside of the housing market and are not reflective of the wider market,” Reardon said.
“Older households who have seen their wealth rise due to property price growth are well capitalised and unlikely to face any restriction in access to capital, however, younger people who are in a wealth accumulation phase will.
“These interventions by APRA risk exacerbating the intergenerational inequity caused by rising home prices.
“There are households in their 30s and 40s who purchase an investment property as part of their personal savings strategy. These types of investors are critical to a well-functioning housing market and boost the supply of rental properties. They do not reduce the supply of housing, because they do not live in those houses.”
The HIA chief economist said: “We still need investors to supply rental properties in established areas where there are very low rental vacancies.
“This continues the belt and braces approach to financial regulations that has seen mortgage arrears in Australia approaching zero.”
Reardon continued:“The housing industry is reliant on a stable and reliable financial sector.
“But since the GFC, the growth in restrictions on lending have unpicked much of the Keating reforms of the 1990s.
“It should be banks that determine if an individual can service a loan, not the government.”
He concluded: “Macroprudential restrictions constrain competition among banks and ensure borrowers pay a higher cost.
Instead, Reardon suggested it was time for the Australian Government to undertake a “Campbell” style review of macroprudential restrictions and “their adverse impact on housing supply in Australia.”
[Related: APRA announces new lending limits]
