Australia's self-managed super fund sector has reached 663,000 funds with $1.021 trillion in net assets, and new registrations hit a record 42,293 in the year to June 2025. Younger, more strategically minded trustees are reshaping the market, with the 30–45 age group recording 31% growth in membership switches. Specialist non-bank lenders, advisers and accountants must work more closely together to meet rising demand. This sector focus from Mortgage Professional Australia, produced in partnership with La Trobe Financial, ORDE Financial, Bluestone Home Loans, Liberty Financial, Firstmac and Pepper Money, examines who is entering the SMSF lending market, why property dominates, how leverage should be managed and what separates high-performing brokers.
Australia now has 663,867 self-managed super funds with 1,224,936 members and $1.021 trillion in total net assets. New fund registrations jumped to 42,293 in the year to June 2025, up from 33,041 the prior year. The fastest-growing cohort is younger professionals: members switching into SMSFs grew 21% between 2023/24 and 2024/25, with the 30–45 age group recording the strongest growth at 31%. Siobhan Williams, head of mortgages for retail broker at Pepper Money, says: 'More younger professionals and mid-career Australians are establishing SMSFs, and property can be in the mix of that plan, depending on what advice they have received from a financial adviser.'
Property accounts for roughly 17% of total SMSF assets, with non-residential real property at $116.7 billion and residential real property at $60.9 billion as at December 2025. Three forces drive that endurance: trustee control over asset selection, the cultural primacy of property as a store of wealth, and a post-COVID focus on diversification. Cory Bannister, senior vice president and chief lending officer at La Trobe Financial, puts it plainly: 'Australians love property. Real estate continues to dominate household wealth and investment thinking. Property is familiar, tangible and widely perceived as resilient, which keeps it front of mind as a long-term store of value.'
The most common SMSF borrowing use case for brokers is the SME owner acquiring business premises through the fund and leasing them back to the operating entity. Business owners now account for around one in eight working Australians, and the professional workforce has grown by more than 140% over the past 25 years. Lee Prior, director of distribution at ORDE Financial, explains: 'A common example is SME owners acquiring business premises through their SMSF and leasing them back to the operating entity, creating certainty around premises while building long-term wealth within super.' Richard Chesworth, head of specialised distribution at Bluestone Home Loans, adds that Bluestone has recently launched a commercial SMSF product for mortgage brokers to help bridge the gap into commercial lending.
Limited recourse borrowing arrangements totalled $77.8 billion in SMSF assets as at December 2025, up from $52.8 billion in June 2020. Getting leverage right requires testing borrowing capacity against the fund's actual investment strategy, not just assets and serviceability. Chesworth cautions: 'Higher leverage can push a fund into a more negatively geared position, and negative gearing is far less compelling in a concessionally taxed environment like an SMSF. Ideally, the fund should aim to be neutrally or positively geared, if not from day one, then at least early in the life of the strategy.' Matt Heinnen, general manager for commercial at Liberty Financial, adds that sustainability now drives the conversation: 'What we're seeing today is a stronger focus on sustainability rather than maximising borrowing.'
High-performing SMSF brokers distinguish themselves through coordination across accountants, financial advisers and legal professionals rather than a product-led approach. Seven in 10 members switching into SMSFs did not have a pre-existing advice relationship, which underscores the guidance role brokers now play. Marie Mortimer, chief commercial officer at Firstmac, says: 'The strongest intermediaries are not product-led. They are structure-led and very clear on role boundaries. They understand what sits within their remit and what needs to be handled by an accountant, financial adviser or lawyer.' Bannister reinforces this: 'Successful brokers recognise that SMSF lending is as much about coordination and advice as it is about the loan itself.'
Regulatory clarity around limited recourse borrowing arrangements has reinforced the importance of defined responsibilities across each party in an SMSF transaction. The ATO's May 2025 guidance update on offset accounts with LRBAs prompted some non-bank providers to amend product parameters, though Chesworth notes Bluestone's guidelines remained unchanged. Prior describes ORDE's approach: 'We make it very clear that decisions around establishing an SMSF or selecting an investment strategy sit with the trustee and their accountant or adviser, not with the broker or lender. We require confirmation that appropriate advice has been received and that the LRBA aligns with the fund's investment strategy.' Bannister adds that La Trobe views regulation as 'a mechanism that reinforces good lending practices and supports financially healthy long-term outcomes.'
The structural features of LRBAs are set in legislation, so the most meaningful progress is happening in process rather than product design. Pepper Money introduced the ability for eligible borrowers to access up to 90% LVR on residential SMSF loans without a lender protection fee, and Williams says the firm's SMSF offering recorded 112% year-on-year growth. Mortimer frames the direction clearly: 'SMSF lending has long been viewed as slow, expensive and difficult to navigate. There is an opportunity to reduce unnecessary friction through better use of digital tools, stronger in-house capability and clearer broker education.' Bannister cautions that speed must not come at the cost of rigour, noting that 'well-reported fraud allegations emerging across parts of the financial services sector highlight the importance of maintaining strong verification processes, robust compliance frameworks and clear accountability.'