I am a fan of SMSF’s and the ability to gear property investments for the right clients. I have been disappointed that the major banks have ceased this type of lending. I suspect it is to simplify their operations and because they fear their exposure to a declining property market and the effect of an oversupply in unit as most funds can only purchase units with the very strict lending criteria. The limited recourse nature of the loan is their concern even though they typically only lend up to 70% of a property’s value at higher rates.
I think they could have taken a different approach but because this type of lending is more difficult and requires greater expertise it seems they decided it’s just not worth it sadly? It’s still legal and I hope the 2nd tier lenders fill the void.
See the below article for more information
https://nomorepractice.com.au/opinions/with-banks-pulling-out-is-this-the-end-of-smsf-lending/
