APRA steps up
Australia's Prudential Regulator APRA launched an initial salvo of macroprudential measures this week, limiting new mortgage lending for ADIs to 20 per cent of new loans at a debt-to-income ratio of 6 times or more, effective from February 2026.
The changes are due to come into force from 1 February next year.
In reality, currently lending standards haven't been allowing for so much high DTI lending anyway since 2021, currently tracking at around 5 per cent of new term loans by value, though some individual institutions may need to check themselves.
High loan to value ratio lending is also well down from where things used to be (the same is also true for interest-only lending).
Indeed, bank stocks were trading higher this morning, though there may be some impacts on the government's 5 per cent deposit guarantee scheme for first homebuyers.
The changes don't apply quite so strictly to non-bank lenders, of course.
Most likely, today's announcement is an initial warning shot from the prudential regulator to lenders to keep a close eye on mortgage standards, with further measures to follow if risks are allowed to build up, particularly in the form of speculative activity via investment lending.
CapEx spikes
Private new capital expenditure spiked 6.4 per cent in the September quarter, defying economist expectations for a more subdued figure.
Source: ABS
What gives?
On closer inspection, the surprise result was driven by a gargantuan 91½ per cent increase on expenditure for data centres and other telco buildings and equipment.
Source: ABS
This helped to drive equipment expenditure to a record high in the September quarter.
Granted, these figures are lumpy, and there was no market reaction to speak of, but it does look as though Australia will be seeing some major investment in data centres.
Capital expenditure plans for 2025/2026 were also a bit better than expected at around $190 billion, so this was quite an upbeat release overall.
---
1. Download our property buying guide
Download our free property buying guide here.
You can also check out a few of our recent property purchases here.
Get in contact with us today if strategic property investment is your thing.
2. Subscribe to our Top 10 Podcasts for Investors
Listen in to our podcasts
The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with well over 50,000 audio downloads per month, and growing fast.
And our popular Low Rates High Returns Show also remains available on Spotify.
3. Subscribe for my free daily blog
Subscribe for my free daily blog with more than 4 million hits here.
You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 15,500 followers.
By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here.
My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here.
4. Work with me privately
For a limited time you can book in a free diagnosis call with me here, so book in a call today.
