The Urban Development Institute of Australia argues that banning leverage in self-managed super funds for housing will strip more than 40,000 new homes from the pipeline, overwhelming gains expected from the $10 billion Housing Australia Future Fund.
Treasury estimates around 4000 new home loans go to self-managed super investors each year, a figure the institute uses as a base case.
Industry groups argue that number is already too conservative, pointing to stronger demand patterns.
Policy makers are being pushed to reconcile these competing assumptions.
Urban Development Institute of Australia modelling suggests every self-managed super fund loan can underpin two or three additional dwellings, because developers leverage those early sales to scale projects.
Based on Treasury’s 4000-loan estimate, that multiplier implies as many as 12,000 homes a year would not proceed once borrowing is banned.
Developers often rely on self-managed super buyers at the start of a project, when risk is highest and traditional buyers are more cautious.
Those early commitments, the institute says, translate directly into whether a project hits the threshold needed for bank finance.
Self-managed super purchases frequently account for roughly 30% of presales in new developments, forming the critical base that lenders want to see before releasing construction funding.
Losing that concentrated chunk of demand at the front end is likely to make some projects smaller and push others below viability thresholds entirely.
Housing groups warn the impact compounds over successive project cycles, which makes headline loan numbers look deceptively modest.
Debate now centres on whether the borrowing ban delivers enough stability benefits to justify the hit to new housing stock.
