Industry groups say the federal plan to stop self-managed super funds from borrowing for residential property and to remove their access to the 50% capital gains tax discount slices out a key early funding channel for new apartment projects.
Developers typically need a threshold of off-the-plan presales to secure bank finance and start construction, and SMSF buyers often help hit that target. Under the budget deal securing Greens support for curbs on negative gearing and capital gains tax concessions, that pipeline of geared SMSF investment into housing would be shut.
Developers say these changes directly affect projects delivering homes priced up to about $1.2 million, a large slice of the off-the-plan apartment market in major cities.
Self-managed super funds have become significant buyers in this segment, especially in early sales campaigns where developers need momentum to convince lenders. Industry estimates suggest SMSF investors account for roughly 30% of presales in some new apartment projects, meaning the policy shift could weaken project feasibility.
Losing those buyers early in a campaign could delay or derail launches.
Policy makers frame the reforms as a way to ease competition for first home buyers by reducing tax-advantaged investor demand chasing the same stock.
Developers counter that while the measures may cool investor interest, they also remove a consistent pool of early-stage capital that helps bring new supply to market. Less presale demand from SMSFs could force developers to lean more heavily on owner-occupiers and non-super investors to meet finance thresholds.
That adjustment is likely to test project economics, especially in a high-cost construction environment.
