What happened
The ban on new residential Limited Recourse Borrowing Arrangements inside self-managed superannuation funds took effect following the end of a 45-day transition window on 10 August. Revised market data shows the LRBA sector controls approximately $75 billion in assets backed by $28.9 billion in debt, with existing residential arrangements grandfathered for refinancing.
Why it matters here
The policy shift closes a popular leverage vehicle for self-employed Australians building property portfolios in super. Capital previously targeted at residential property via SMSFs is expected to reallocate into commercial real estate, equities, and yield-bearing instruments, altering liquidity flows across local financial advice and mortgage markets.
What to watch
ATO quarterly SMSF statistical reports tracking capital allocations into commercial property and fixed-income assets.
Source
mpamag.com