APRA plans to clamp down on housing market in coming months

Shot of city skyline.

The Australian Prudential Regulation Authority (APRA) is currently weighing up strategies to cool down the nation’s housing market, citing concerns about growing risks to the economy. 

At the quarterly meeting of the Council of Financial Regulators last week, members discussed soaring Australian property prices, which many are worried could tip household debt levels into unsustainable territory.

“The recent lockdowns have reduced transactions and new listings, but prices are still rising briskly in most markets,” the council said. 

“The council is mindful that a period of credit growth materially outpacing growth in household income would add to the medium-term risks facing the economy, notwithstanding that lending standards remain sound.”

While the property boom has certainly slowed in recent months, Australian housing values are still 18.4 per cent higher than they were a year ago, according to CoreLogic’s August update. In comparison, wages have increased by just 1.7 per cent.

CFR members noted that even with lockdowns across major markets, new housing loan commitments are high and credit growth is expected to remain relatively strong for some time.

In light of these conditions, the CFR discussed the need for a shift in regulatory policy. Possible measures will be outlined in an information paper by APRA due to be released in the coming months.

The regulator has a number of macroprudential tools at its disposal, including applying caps to loan-to-value ratios, which would affect those with low deposits, and restricting lending to high debt-to-income borrowers.

RELATED: Regulators to reform home lending as property prices continue to rise

Recently, Commonwealth Bank chief executive Matt Comyn called on banks to tighten their lending standards ahead of any rule changes by regulators, saying it would be “prudent to act sooner rather than later.”

CBA’s preferred approach has been to lift its serviceability floor rate, which is the higher interest rate banks use when assessing a borrower’s ability to service a loan.

The International Monetary Fund also issued a report last week warning that rising household debt levels could put undue strain on Australia’s economy. 

It recommended banks adopt a more conservative approach to lending, and also spoke of the need to reform housing-related taxes and ramp up residential construction.

For more information on property and lending trends, visit our home loan statistics page.

Home loan comparisons on Mozo - last updated 2 March 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • Mozo Expert Choice Badge
    Home Fixed Rate

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    5.80% p.a.
    fixed 3 years
    5.91% p.a.

    Enjoy the security of a competitive fixed interest rate from Up. No application, monthly, annual, redraw, or discharge fees to pay. Up to 50 free offset accounts available. Up home loans are only available to owner-occupiers buying or refinancing in major Australian cities. Up is 100% owned by Bendigo Bank. New joiners get $10 by signing up to the app using code UPHOMEMOZO. (T&Cs apply). Mozo Experts Choice award winner.

  • Straight Up

    Obliterate, Owner Occupier, Principal & Interest, <50% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.24% p.a. variable
    6.24% p.a.

    Get a low variable rate depending on your deposit with Athena’s Straight Up Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.

  • Offset Home Loan

    Package, Owner Occupier, LVR<60%, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    6.15% p.a. variable
    6.40% p.a.

    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.


* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.