A lot of people who have spent the past year planning a second property are asking the same question: does the investment still stack up, and if so, which kind? The latest lending figures suggest many are rethinking that answer. This post sets out what the numbers show, how the SMSF rules have moved, and what to weigh before committing.
What the June quarter numbers show
The PropTrack-Terri Scheer Investor Report 2026 puts the drop in investor lending at 9 per cent, with the fall concentrated in the June quarter, following a strong 2024 and 2025. Owner-occupier lending dipped by 3 per cent over the same period, so the pullback among investors was noticeably steeper.
New-home lending moved in the opposite direction. Loans for building or buying new homes rose 24 per cent, and the report describes that rise as part of the intended effect of the government's property tax changes. The stated aim is to steer investor money toward adding supply rather than bidding up existing stock. From 1 July 2027, investors can fully negative-gear only newly built homes, according to MacroBusiness reporting on the federal budget.
These are general descriptions of policy as reported. How any change applies to your own tax position is a question for a registered tax agent.
How the SMSF rules have changed
For SMSF investors, the bigger shift is in how residential property can be financed. The Mortgage and Finance Association of Australia notes that SMSFs have lost the ability to set up new LRBAs for residential property from 10 August 2026. Contracts signed before that date are generally meant to proceed even if settlement falls after the commencement date.
A few things remain open. Buying residential property with cash held in the fund is still possible, because the restriction targets borrowing. Commercial premises are a different story: SMSFs can still borrow to purchase commercial or industrial property under an LRBA. The property has to meet the business real property definition, broadly land and buildings used wholly and exclusively in one or more businesses.
For new residential purchases, EWC works with a structure where the property is held in a unit trust that the fund invests in, with the borrowing sitting in the unit trust rather than the fund. Unlike an LRBA, that structure can fund construction. The fund typically contributes a deposit, often in the 20 to 30 per cent range. Trustees and related parties also cannot live in residential property held by the fund or rent it from the fund under the SIS Act rules. An SMSF specialist accountant can confirm how these apply to a specific fund.
The trade-offs of buying new
A new build can come with a newer structure and fewer immediate maintenance questions, but it also has its own risks. Construction timelines can slip, and the valuation at completion may differ from the contract price. The rent a property can achieve matters more than the headline price, so an independent rental appraisal is worth getting before you commit. Realistic rental yields and vacancy periods both feed into the cash flow picture.
HomePay, which EWC offers, means zero monthly payments for the first 12 months during construction. Standard repayments then begin, so the step-up is worth modelling before you sign. Depreciation, deductions and how they interact with your other income are matters for a registered tax agent.
The shift toward new homes may also affect supply in some areas. Westpac forecast that the number of new homes built by property investors would rise by about 45% over three years. That is a forecast from one bank, not an outcome anyone can count on.
A worked example
Take Daniel, 38, a PAYG employee looking at a new townhouse priced at $650,000. A 20 per cent deposit is $130,000, leaving a loan of $520,000 before costs. If the property could be rented at $600 a week, gross rent would be $31,200 a year, or a gross yield of about 4.8 per cent. Vacancy weeks, rates, insurance and management fees all reduce the net figure. These numbers are arithmetic for illustration only, not a forecast.
Now picture a super fund in accumulation phase with $400,000 in cash, considering the same $650,000 property. A cash-only purchase at that price needs more than the fund holds, so the unit trust route would be one thing to discuss with specialists. Income earned in accumulation phase is normally taxed at 15% for concessional contributions, and the tax on fund income depends on deductible costs. Once a fund moves into pension phase, investment earnings are completely tax-free up to the transfer balance cap, which increased from $2.0 million to $2.1 million on 1 July 2026.
The investor pullback and the shift to new builds come from the same policy change, and the rules that matter for you depend on whether you buy in your own name or through a fund.
What to do next
- Talk to a licensed mortgage broker. Ask them to walk through the repayment step-up after construction, and how a HomePay style build would sit alongside your other borrowing. EWC coordinates the property and finance side, and you can see how that works on the services page.
- If you are considering an SMSF, speak to an SMSF specialist accountant. Ask about contract timing, the unit trust structure, and the fund's liquidity. Until that guidance is issued, speak to an SMSF specialist accountant before refinancing an existing loan. You can send questions through the contact page.
- Get an independent rental appraisal and tax advice. A registered tax agent can explain how deductions and depreciation apply to you. If you want to talk through how the property and finance pieces fit together, you can book a free call. More reading is available on the insights page.
General information only, not personal financial advice. Speak with a licensed adviser before acting.