A recent government change restricting limited recourse borrowing arrangements (LRBAs) for self-managed super fund (SMSF) purchases of off-the-plan property is set to reduce the pool of buyers developers rely on to secure construction finance.

For many apartment projects, hitting the pre-sale threshold required by lenders depends heavily on SMSF purchasers. Without access to LRBAs, fewer SMSF trustees will be able to buy off-the-plan, which means fewer qualifying pre-sales, and in turn, fewer projects reaching the construction finance stage at all.

[Complete the survey here]

Why this matters for housing supply

The timing is significant. The change lands in the middle of the National Housing Accord period (1 July 2024 to 30 June 2029), a period during which governments, industry and investors are meant to be accelerating dwelling delivery, not slowing it down.

The Urban Development Institute of Australia (UDIA) is running an industry survey to quantify the scale of this impact and build an evidence base to take to government.

Early indications from industry consultation suggest the impact could be substantial, though these figures are forecasts the survey is specifically designed to test and validate, not confirmed data:

• SMSF purchasers may represent an average of around a third of qualifying financial pre-sales across current pipelines
• Average delays to construction commencement could run to around 18 months
• Nationally, more than 40,000 dwellings could be delayed or shelved as a result

How you can help

UDIA needs data directly from developers to move these forecasts from estimate to evidence. The survey asks about SMSF representation in your current pre-sales, and your expectations for delayed or shelved dwellings under the new settings.

Responses are confidential and will be used in aggregate only. The findings will support UDIA's representations to government on the impact of this change to the National Housing Accord targets.

[Complete the survey here]

The more developers who respond, the stronger the case UDIA can put forward on behalf of the industry. Submissions end midnight Wednesday July 22nd.