The Australian Labor government’s ban on self-managed super funds (SMSFs) borrowing to purchase residential property was predicated on significantly underestimated data regarding non-bank lending activity.
New figures from the lenders' industry body indicate that non-bank institutions originated more than 16,000 residential loans to SMSFs in the previous year, a volume exceeding four times the total cited by federal officials when introducing the restrictions.
The discrepancy undermines the evidentiary basis for the policy, which aimed to curb speculative investment in the housing market through superannuation vehicles.
By relying on data that captured only a fraction of actual non-bank lending, the government failed to account for the scale of shadow banking activity in the residential sector.
This oversight suggests the regulatory response may have been misaligned with the actual market dynamics driving SMSF borrowing.
The revelation intensifies scrutiny on the government’s approach to housing affordability and financial regulation.