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The lending data
According to ABS Lending Indicators for the June quarter 2026 (seasonally adjusted):
- new investor commitments fell 8.6% by number (to 52,599) and 10.2% by value (to $37.1 billion);
- total dwelling commitments fell 5.4% by number and 5.2% by value, to $97.6 billion.
APRA’s debt-to-income limit
From 1 February 2026, APRA requires banks and other authorised deposit-taking institutions (ADIs) to limit new lending at a debt-to-income (DTI) ratio of six or more to 20% of new loans. The limit applies separately to owner-occupier and investor loans and is measured quarterly. Bridging loans and loans for new construction are excluded. APRA said the limit is “unlikely to restrict lending to owner-occupiers or first home buyers in the near term”. Investors carry more total debt, so they are more likely to be affected.
Example: on a $150,000 gross income, total debt of $900,000 or more is a DTI of six. Non-bank lenders aren’t covered by APRA’s limit but apply their own policies.
The 3% buffer
APRA has kept the serviceability buffer at 3 percentage points. Lenders test whether you could repay at your rate plus 3 points.
Canberra fundamentals
Cotality reports Canberra gross yields of 4.0% for houses and 5.5% for units. Unit values fell 2.1% over the year and house values 1.5%. On Cotality’s measure the national vacancy rate rose to 2.0% in September. Cotality notes “opportunities for neutral to positive cash flow remain low”.
Canberra’s own rental market has loosened. SQM Research put the city’s vacancy rate at 1.9% in September 2026, down from 2.1% in August but still among the highest of the capitals, with 1,169 dwellings available. SQM’s national figure was 1.4%. Canberra’s combined advertised rent was $686.22 a week, down 0.2% over the month and up 4.8% over the year.
More vacant rentals means more competition for tenants. Build a realistic vacancy allowance into your numbers rather than assuming the property is leased every week of the year.
Holding costs: ACT land tax
Canberra investors face a cost structure the states don’t share. ACT land tax applies to any residential property that isn’t your principal place of residence, including rented homes, and the ACT has no tax-free threshold. Every investment property is liable from the first dollar.
According to the ACT Revenue Office, from 1 July 2026 the fixed charge is $1,778 a year, up from $1,693. On top of that sits a marginal rate on the property’s Average Unimproved Value (AUV), starting at 0.54% and rising through five bands. The marginal rates are unchanged for 2026–27.
Example only: on an AUV of $600,000, the annual land tax works out at roughly $7,400. Your own AUV is the average of the land’s unimproved value over the past five years, and the ACT Revenue Office assesses it. Check your own notice rather than relying on an estimate.
That bill lands every year, whether or not the property is tenanted. Factor it in before you borrow.
What this means for you
- Calculate your DTI, including credit card limits.
- Expect lender policies to differ. Some lenders may set tighter internal limits.
- Factor in the 1 July 2027 negative gearing change.
- Stress-test cash flow at higher rates and with a vacancy.
- Structure well from the start. See our investment property loans page or our borrowing power calculator.
Sources
- Australian Bureau of Statistics, Lending indicators, June Quarter 2026 — https://www.abs.gov.au/statistics/economy/finance/lending-indicators/latest-release
- APRA, Activating debt-to-income limits as a macroprudential policy tool — https://www.apra.gov.au/news-and-publications/activating-debt-income-limits-macroprudential-policy-tool
- Cotality, Home Value Index, October 2026 — https://discover.cotality.com/hubfs/Article-Reports/COTALITY%20HVI%20OCT%202026%20FINAL.pdf
- SQM Research, National Vacancy Rates, September 2026 (released 13 October 2026) — https://sqmresearch.com.au/
- ACT Revenue Office, How land tax is calculated — https://www.revenue.act.gov.au/land-tax