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The joint call from the Australian Finance Industry Association (AFIA), Housing Industry Association (HIA), Property Council of Australia, Real Estate Institute of Australia, Self-managed Super Fund Association, and Urban Development Institute of Australia comes as the ban on new residential borrowing within SMSFs comes into effect.
The ban, which was announced following a last-minute budget concession to the Greens, had been in a 45-day transitional period since royal assent, but that period ended on 10 August.
Potential impact enormous, warns industry
In the statement, the industry said its data indicated that SMSF borrowing directly financed the construction of thousands of new detached homes each year and an even larger number of apartment commencements.
The extent of the impact of the change has been hotly debated. Data released by AFIA, a signatory to the statement, found its specialist non-bank lender members wrote more than 16,000 new residential loans to SMSFs in the financial year 2026, backed by $10.3 billion in security.
That compares with the government’s working assumption of around 4,000 new LRBAs each year.
Additionally, a HIA survey of Australia’s largest home builders found that the SMSF changes alone could reduce detached-home commencements by between 3.5 per cent and 5 per cent annually.
The association further warned that about 2,500 new-home contracts already signed were expected to be cancelled due to buyers and developers failing to complete the necessary administrative arrangements before the deadline.
Brokers speaking to Broker Daily have also raised concern over the ban’s impact on housing supply.
“With a third of Australians renting and cost of living pressures particularly for those Australians that do not own their home and thus experiencing housing insecurity, this ban does not just adversely impact housing supply at aggregate, it impacts intergenerational fairness and financial wellbeing of working Australians,” the statement said.
Investigation proposed
The industry, therefore, called on the government “at a minimum” to allow the continuation of SMSF borrowing for newly constructed homes.
During which time, Treasury should “undertake and publish a comprehensive assessment of the impact of the ban on detached home commencements, apartment construction, project pre-sales, rental supply and progress towards the Government’s 1.2 million homes target”.
“Restricting investment in established homes still adversely affects new housing supply. But restricting finance for a home that has not yet been built means the policy reaches directly into the new-home market and contradicts the Government’s own tax reforms designed to encourage new housing,” the statement said.
“At a time when Australia is already struggling to build enough homes, there should be a clear and public justification for any policy expected to reduce the building of new homes.”
[Related: Brokers look beyond the SMSF borrowing ban]
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