John Lonsdale, Chair of the Australian Prudential Regulation Authority: The Record, 2022–2026
Banking & Lending Regulation (21350) −25.2% June quarter 2026 · reduction APRA’s assessment rules make to the largest loan a borrower can be approved for, at the average new owner-occupier variable rate
The Office and the Office-Holder
John Lonsdale became Chair of the Australian Prudential Regulation Authority (APRA) on 31 October 2022, succeeding Wayne Byres (APRA, 28 October 2022). He joined APRA as a Deputy Chair on 8 October 2018, with oversight of the banking sector, culture and remuneration, crisis resolution and collaboration with peer regulators. Before that he worked at the Treasury for more than 30 years, latterly as a member of its Executive and as Deputy Secretary, Markets Group, responsible for financial system, consumer and foreign investment policy. In 2014 he led the secretariat to the Financial System Inquiry (APRA, executive team).
APRA supervises banks, insurers and most superannuation funds. For housing, its principal instruments are its lending standards: the serviceability buffer, which requires a lender to test whether a borrower could meet repayments at a rate above the one charged, and the macroprudential tools that limit particular kinds of lending. As Chair he also represents APRA on the Payments System Board and the Council of Financial Regulators. To June 2026 he had appeared before parliamentary committees 14 times as Chair: 12 times at Senate Estimates and twice before the House of Representatives Economics Committee.
The Record in Decisions
Lonsdale inherited a 3 percentage point serviceability buffer, raised from 2.5 points on 6 October 2021 under his predecessor (APRA, October 2021). APRA has held it at 3 points at every review of his tenure. The countercyclical capital buffer, the capital banks hold to release in a downturn, took its new default of 1% of risk-weighted assets on 1 January 2023 (APRA, December 2022) and has not changed since.
| Date | Decision | Settings after |
|---|---|---|
| 27 Feb 2023 | Settings held; buffer described as prudent given the potential for further rate rises (release) | Buffer 3 pp; capital buffer 1% |
| 9 Jun 2023 | Letter to banks, signed by the Chair, on the use of exceptions to serviceability policy (letter) | Unchanged |
| 4 Dec 2023 | Settings held (release) | Unchanged |
| 29 Jul 2024 and 25 Nov 2024 | Settings held (November release) | Unchanged |
| 23 Jul 2025 | Settings held; APRA to prepare limits on riskier lending with banks (release) | Unchanged |
| 27 Nov 2025 | Debt-to-income limit announced, in force from 1 February 2026 (release; letter) | Up to 20% of new owner-occupier loans, and separately 20% of new investor loans, at six or more times income |
| 28 May 2026 | Settings held; limit unchanged (release) | Buffer 3 pp; capital buffer 1%; limit 20% and 20% |
The debt-to-income limit is the principal macroprudential decision of his tenure. It caps the share of each bank’s new lending that may go to borrowers owing six or more times their income, counted separately for owner-occupiers and investors. It applies to banks and other deposit-taking institutions, not to non-bank lenders. Bridging loans for owner-occupiers and loans to build or buy new dwellings are exempt. When it was announced, about 10% of new investor loans and 4% of new owner-occupier loans were at that level, so the limit did not bind across the system. It was set as a precaution against a rise, not a response to one.
Share of New Housing Loans at Six or More Times Income, March 2022 to June 2026
APN calculation based on Australian Prudential Regulation Authority data: Quarterly Authorised Deposit-taking Institution Property Exposures, June 2026 edition, Table 1c; per cent of the value of new loans funded, by portfolio. Gold line: owner-occupier loans; slate line: investor loans. The limit applies to each portfolio separately from 1 February 2026; exempt loan types are included here, so these system shares sit slightly above the limit-test measure.
The chart shows the setting in which the limit arrived. High debt-to-income lending fell sharply as interest rates rose in 2022 and 2023. The investor share rose again through 2025 as rates were cut, reaching 11.5% in the December quarter, then fell to 8.9% by June 2026 as rates rose again. The owner-occupier share has stayed between 3.4% and 4.2% since mid-2023.
“By activating a DTI limit now, APRA aims to pre-emptively contain risks building up from this type of lending”
Beyond housing lending, his tenure has brought a decision to phase out Additional Tier 1 hybrid securities from bank capital (announced December 2024, transition from January 2027), a package announced in March 2026 that tightens liquidity requirements for the largest banks and lowers risk weights on some business lending (16 March 2026 speech), and proposed changes to governance standards for boards.
What Was Said, and What Followed
APRA does not publish economic forecasts. Its checkable statements are assessments of lending conditions, expectations of how lending would respond, and commitments to act by a stated time. The ledger records the principal ones, tested against APRA’s own published statistics and ABS and RBA data. Across 85 such statements identified in the record, 44 held, 13 held in part, one was not borne out, two were revised and 25 remain open or cannot be tested from public data.
| Date | Statement | What followed | Status |
|---|---|---|---|
| 27 Feb 2023 | The 3% buffer “remains prudent given the potential for further interest rate rises, high inflation and risks in the labour market” (release) | The cash rate rose four more times, to 4.35% by November 2023. Non-performing housing loans rose from 0.72% to 0.86% of the book over 2023 and stayed low. | Held |
| 31 May 2023 | Asked whether he expected the use of exceptions to serviceability policy to increase: “No, we’re not.” (Hansard) | The share of new lending approved as exceptions rose from 2.75% in the June quarter of 2023 to 4.46% in the September quarter, and was 5.78% in June 2026. In October 2024 he told the House committee it was “now around five per cent”. | Not borne out |
| 12 Oct 2023 | “A more complete review of the liquidity standard for banks has been pushed back to next year” (speech) | APRA rescheduled the review to 2025 in July 2024. Proposals were announced in March 2026, with consultation to begin within 12 months of June 2026. | Revised |
| 4 Dec 2023 | “The mortgage serviceability buffer has proved to be effective over the past 18 months” (release) | Through a 3.5 point rise in the cash rate from June 2022, non-performing loans rose only from 0.78% to 0.86%, and the share of new lending at six or more times income fell from 22.2% to 5.6%. Public data cannot separate the buffer’s effect from that of rates and prices. | Held |
| 26 Jun 2024 | “If we believe economic conditions warrant changing it, we will do so.” (speech) | The buffer has been held at 3 points at every later review. APRA has not stated that conditions warrant a change. | Open |
| 25 Nov 2024 | About 1% of home loans non-performing, $23 billion, “trending up”, with potential for further rises (speech) | The figures reproduce exactly (1.04%, $23.5 billion). The share peaked at 1.08% in March 2025 and eased to 0.99–1.01% from late 2025, while 30–89 day arrears fell. | Held in part |
| 18 Mar 2025 | A proposed limit of 10 years for non-executive directors (speech) | Extended to 12 years in October 2025; the draft standard of June 2026 sets 12 years (release). | Revised |
| 24 Jul 2025 | Lower rates could bring “a rise in riskier forms of residential lending”; APRA would prepare limits that “can be activated in a timely manner if needed” (speech) | Rates were reduced in August 2025. Investor credit growth rose from 6.4% a year in June 2025 to 9.0% in January 2026, and the investor share of new loans at six or more times income from 8.7% in the June quarter to 11.5% in the December quarter. The limit was announced four months later. | Held |
| 3 Dec 2025 | “These limits won’t be immediately binding at a system level” (opening statement) | System shares stayed at or below about half the limit (owner-occupier at most 4.1%, investor at most 11.5%), and new loans funded in the June quarter of 2026 were 6.8% higher than a year earlier. Whether the limit has bound at any individual bank is not published. | Held |
| 3 Dec 2025 | Housing at “a turning point in the financial cycle”, with risk building in high debt-to-income and high loan-to-valuation lending and investor lending (opening statement) | Lending above 90% of the property’s value rose from 6.2% to 7.7% of new loans in the next quarter and stayed there. High debt-to-income lending rose for one quarter, then fell; the investor share of new lending did not rise further. | Held in part |
| 27 Nov 2025 | “We will consider additional limits, including investor-specific limits, if we see macro-financial risks significantly rising or a deterioration in lending standards” (release) | No further limit has been imposed. Investor credit growth reached 10.4% in June 2026, while the investor share at six or more times income fell to 8.9%. APRA reported in May 2026 that lending standards had not eased. | Open |
| 11 Feb 2026 | “We’ll do it again in May and give you an update then.” (Hansard) | An update was given at the next hearing, on 5 June 2026. It covered the settings and high loan-to-valuation lending, not the debt-to-income data the exchange concerned. | Held in part |
| 16 Mar 2026 | Consultation on capital to start “in the first half of this year” (speech) | The consultation on credit-risk capital opened on 29 June 2026 (release). | Held |
Loans Approved as Exceptions to Banks’ Serviceability Policies, March 2019 to June 2026
APN calculation based on Australian Prudential Regulation Authority data: Quarterly Authorised Deposit-taking Institution Property Exposures, June 2026 edition, Table 1c; exceptions to serviceability policy as a share of the value of new housing loans funded. Gold bars: each quarter. Slate dashed line: 31 May 2023, when the Chair told Senate Estimates he did not expect the share to rise. Shaded band: the 2–3% range he described. The series begins in March 2019; the earlier published series also counted verification waivers and is not comparable.
The one statement not borne out concerns loans approved outside banks’ own serviceability policies. In May 2023 he put the share at two to three per cent and did not expect it to rise. It rose in the following quarter and has stayed about twice that level, which APRA itself reported in November 2024. APRA wrote to banks on the subject in June 2023. Exceptions are permitted under APRA’s standard, but they are the channel through which the buffer is relaxed case by case.
Positions Held Throughout
Resilience first. He has consistently refused to lower the capital standards set after the global financial crisis, while adjusting how they apply to smaller banks.
“The results also underline why, after spending more than a decade building the resilience of the banking system, we have no intention of dialling it back and weakening these gains.”
John Lonsdale, Australian Banking Association conference, 26 June 2024
The buffer as a contingency. He has described the buffer as protection against a range of shocks to a borrower’s income, not only against rate rises: “In short, it’s a buffer for uncertainty” (25 November 2024). He has accepted that it limits borrowing: “APRA’s serviceability buffer also plays a role in reducing borrowing capacity, and that has led to calls for us to lower it.” (26 June 2024)
A safety mandate, not an affordability mandate. Pressed by members of all parties on who the buffer and the limit exclude, he has kept APRA to its prudential role. To the House committee in October 2024: “We don’t have a particular mandate for affordability for particular cohorts of borrowers.” (Hansard). To Senate Estimates in February 2026: “It’s not really within our mandate to deal with the distributional aspects.” (Hansard)
Acting early. From July 2025 he set out, step by step, the case for readiness: a concern that lower rates would bring riskier lending, then the tools under consideration, then the limit itself. In December 2025 he told Senate Estimates that if risks developed, “We will be back. That is our job.” (Hansard)
Housing and Households
The buffer bears directly on how much a household can borrow. APN’s Banking & Lending Regulation (21350) records that, at the average new owner-occupier variable rate of 6.25% in June 2026, assessing a borrower at 9.25% reduces the largest loan they can be approved for by 25.2%. The same 3 point buffer reduced it by 30.5% in March 2022, when loan rates were at their lowest. A fixed buffer weighs more heavily when rates are low.
On first home buyers, his evidence has been that deposits, not income multiples, are usually their constraint, and that the debt-to-income limit was not expected to restrict them. That has held: owner-occupier lending at six or more times income has stayed near 4%, and first home buyers’ share of owner-occupier loans rose slightly over the first half of 2026. On the expanded 5% Deposit Scheme, he agreed that a 95% loan “is a high LVR”, said APRA was not consulted on the Treasury’s modelling of the scheme, and declined to assess it until loan data arrived (Hansard, 3 December 2025). By June 2026 he reported that “there has been a rising trend in higher LVR lending for housing” (Hansard, 5 June 2026).
Asked in June 2026 whether APRA was consulted on the Budget’s changes to negative gearing and capital gains tax, he answered “No.” (Hansard). On the rental market, he told a Senate committee in February 2024 that he was not aware of evidence linking APRA’s 2017 limits on investor and interest-only lending to rental shortages, while acknowledging that those limits were intended to restrain that part of the market (Hansard).
Under Scrutiny
Renters and the buffer. In October 2024 Mr Jerome Laxale (Labor) put to him the case of renters paying more in rent than their repayments would be, who fail the buffer test. He answered that APRA has no mandate for particular cohorts, pointed to the exceptions available to banks, and described bank proposals for a lower buffer for first home buyers as “a contested view on what the buffer is” (Hansard).
The design of the limit. In December 2025 Senator Barbara Pocock (Greens) questioned why APRA chose a limit that did not bind rather than a cap on investor lending, and put to him: “You haven’t modelled it.” He replied: “We looked very closely at what had happened internationally to calibrate and design our tool.” (Hansard)
Pre-sales for apartment projects. In February 2025 Senator Deborah O’Neill (Labor) criticised the time taken to correct banks’ reading of APRA material as requiring 100% pre-sales before financing unit blocks. He said: “Up until very recently, it was certainly not clear to us that there was any issue.” She replied that it was “a shame that it took from 2017 to 2025” (Hansard).
Superannuation. The sharpest exchanges of his tenure concern funds outside housing. On the Shield and First Guardian schemes, Senator O’Neill asked in December 2025 and June 2026 why APRA raised no concern as the products grew from about $25 million to about $1 billion on the platforms it supervises. He answered “I don’t accept the characterisation” (Hansard, 3 December 2025), and that the two were among about 700 platform products with similar growth. She said: “APRA is attempting to have it both ways here.” (Hansard, 5 June 2026). In his February 2026 opening statement he said that “APRA does not regulate and could not have regulated” those schemes (opening statement).
Former APRA members joining regulated entities. In November 2024 Senator Tony Sheldon (Labor) questioned the movement of former APRA leaders to regulated entities. Lonsdale said the 12-month cooling-off period was “a convention that I have adopted since becoming chair of APRA” and “It isn’t enforceable because I have no tools to enforce it.” Senator Sheldon said he had “deep concerns about how APRA is operating” (Hansard).
Reception
Praise has centred on caution. The Treasurer, Jim Chalmers (Labor), said of the debt-to-income limit in November 2025: “These are important changes that will help with financial resilience and housing affordability”. The Greens defended the buffer against proposals to lower it: Senator Barbara Pocock, dissenting from a Senate committee recommendation in November 2024, said a lower buffer “loads up risk for first home buyers”. A joint submission from consumer groups including CHOICE and the Consumer Policy Research Centre opposed reducing mortgage protections set through APRA’s standards. The Australian Banking Association welcomed his 2025 commitments to proportionate rules for smaller banks and, under its chief executive Simon Birmingham, the 2026 capital recalibration.
Criticism has come mainly from those who want the buffer lowered. Senator Andrew Bragg (Liberal), chairing a Senate inquiry into home ownership, said in November 2024 that “The buffer is bad news for prospective first home buyers, and it can also create mortgage prisons”, and the committee recommended APRA prepare guidance for a lower buffer. At the 2025 election the Coalition, through Shadow Housing Minister Michael Sukkar, pledged to reduce it to 2.5 points. The Finance Brokers Association and the Mortgage & Finance Association sought flexibility, and the Finance Brokers Association called the debt-to-income limit “a very blunt tool”. The Real Estate Institute of Queensland said the limit could squeeze out investors. On bank capital, Geoff Wilson of Wilson Asset Management wrote that the decision to abolish bank hybrids “defies logic”.
Expert assessments of the limit have been mixed. Luci Ellis, chief economist of Westpac, accepted its rationale but expected “some distributional impacts, particularly on investors and younger home-buyers”. Associate Professor Adrian Lee of Deakin University cited overseas evidence that such limits contain risky lending but can “worsen inequalities”. Tim Lawless of Cotality called it “a very light touch”. Senator Pocock called it “an important first step” but argued for investor caps. Brendan Coates of the Grattan Institute said of the buffer that “in principle, it probably makes sense to lower the buffer” where that did not expose banks or borrowers to large risks.
On the Record
Two reported statements differ from the primary record.
| As reported | The primary record |
|---|---|
| That the Chair said the debt-to-income limit would have a “binding effect” on property investors (27 November 2025, from a media briefing) | The phrase does not appear in any APRA publication or Hansard. APRA’s release that day said the limit “is not currently binding” at an aggregate level. His recorded words, to Senate Estimates on 3 December 2025, were that APRA expected it “to be binding on investors well before owner-occupiers” (Hansard). |
| “It’s a contingency against economy-wide risks”, on the buffer (November 2024) | His words, in the speech of 25 November 2024, were that at a system level the buffer “is a contingency against economy-wide risks factors” (speech). The report is a close rendering, not a misattribution. |
APN Analytical Synthesis
The record of nearly four years is one of a Chair who held the settings he inherited as the cash rate rose to 4.35%, and then acted before a rise in riskier lending rather than after it. Arrears stayed low through the rate rises, and the debt-to-income limit was introduced when investor lending at high multiples of income was rising but still well below the limit. The strongest part of the record is its consistency: the buffer, the capital standards and the limit have each been explained in the same terms from the first statement to the latest. The weakest is the one forecast the data contradict: loans approved outside banks’ serviceability policies rose to about twice the level he described, soon after he said they would not.
The record is open. Whether the limit binds at any bank, whether investor-specific limits follow, and how the liquidity review concludes are yet to be seen. This record is updated after each change to APRA’s lending settings and each parliamentary appearance. It speaks only to what the published record can independently support, and does not constitute a view on future lending conditions, interest rates or the housing market.
Sources
The Chair’s speeches, opening statements and APRA’s releases and letters are published at apra.gov.au; parliamentary exchanges are from the official Hansard of the Senate Economics Legislation Committee and the House of Representatives Standing Committee on Economics, November 2022 to June 2026. Figures are drawn from the following:
- Australian Bureau of Statistics (Reference period: June quarter 2026) Lending Indicators [https://www.abs.gov.au/statistics/economy/finance/lending-indicators/jun-quarter-2026], accessed 28 September 2026.
- Australian Prudential Regulation Authority, Quarterly Authorised Deposit-taking Institution Property Exposures, June 2026 edition, released 17 September 2026 [data set], published with the Quarterly Authorised Deposit-taking Institution Statistics [https://www.apra.gov.au/news-and-publications/quarterly-authorised-deposit-taking-institution-statistics], accessed 28 September 2026.
- Australian Prudential Regulation Authority, media releases, letters to authorised deposit-taking institutions, information papers, speeches and opening statements, November 2022 to June 2026 [https://www.apra.gov.au/news-and-publications], accessed 28 September 2026.
- Australian Prudential Regulation Authority, APRA’s executive team [https://www.apra.gov.au/about-us/our-people/apras-executive-team], accessed 28 September 2026.
- Reserve Bank of Australia, Statistical Tables D1 (Growth in Selected Financial Aggregates) and E2 (Household Finances: Selected Ratios) [data set] [https://www.rba.gov.au/statistics/tables/], accessed 28 September 2026.
- Reserve Bank of Australia, Cash Rate Target [https://www.rba.gov.au/statistics/cash-rate/], accessed 28 September 2026.
Australian Prudential Regulation Authority, Australian Bureau of Statistics and Reserve Bank of Australia material is used under a Creative Commons Attribution 4.0 International licence. Calculations are APN’s and are not attributable to the Australian Prudential Regulation Authority, the Australian Bureau of Statistics or the Reserve Bank of Australia.
Reception is drawn from ABC News, The Adviser, Yahoo Finance, Broker News, MPA, Broker Daily, Smart Property Investment, The Conversation, the Westpac and Grattan Institute websites, the Australian Banking Association, the Mortgage & Finance Association of Australia and Wilson Asset Management, and a joint consumer submission to the Senate.
Disclaimer
The analysis and information contained in this publication are for general informational and strategic purposes only and do not constitute financial, investment, legal, or any other form of professional advice. Australian Property Network is not a licensed financial advisor. Property values and market conditions can go up or down. Before making any property or investment decisions, you must conduct your own thorough research and seek independent professional advice tailored to your specific circumstances.
