SMSF shake-up puts commercial property in the frame

IN Partnership with

WHEN A new interstate stopped people from driving past Colonel Sanders’ restaurant in Corbin, KY, the future of fried chicken seemed uncertain. With his shop suddenly off the map, he loaded up his pressure cooker and his secret blend of 11 herbs and spices and took his recipe on the road, selling that instead. Today, some mortgage brokers may consider themselves to be at a similar crossroads. The market is familiar, but circumstances demand a new tack. With housing facing headwinds, a legislated ban on new SMSF residential borrowing and clients whose financial lives have grown steadily more complex, the question of where to find the next layer of growth is pressing. But the answer could be closer than they think.

Bluestone Home Loans has been helping brokers find a way forward for over 25 years. As one of Australia’s leading non-bank lenders, we specialise in supporting self-employed clients, those with complex income and borrowers who might not fit the traditional mould. We look beyond the obvious, working closely with brokers to uncover solutions that help more clients move forward. Our approach is simple, flexible and built on strong relationships. It’s about backing your expertise with a team that’s ready to dig deeper, move faster and help you grow. Helping you turn more scenarios into settled deals is a Bluestone thing.

Find out more

Richard Chesworth, Bluestone Home Loans

Commercial property lending, and particularly SMSF commercial lending, is fast becoming one of the most practical ways to do more with relationships that brokers already have. Richard Chesworth, head of specialised distribution at Bluestone Home Loans, has always held the view that commercial SMSF lending solutions are a must because of the opportunity for business owners to access the business real property rules within an SMSF. The non-bank lender’s commercial offering is relatively new, but the momentum has been building. “What’s changed over the past year is how brokers are using it,” he says. “It’s moved from being something they explore occasionally to something they’re actively [discussing as part of] client conversations, particularly with investors, business owners and SMSF clients seeking direction.”

The opportunity already in the room Like Colonel Sanders, many mortgage brokers are sitting on an opportunity without realising it. A broker with a well-developed residential book is already talking regularly to people whose financial lives have grown more complex than a single home loan. Business owners are thinking about premises. Investors are assessing how to structure assets. SMSF clients are wondering what to do next as the rules around superannuation borrowing continue to shift. Chesworth points to the self-employed as a strong example. “Self-employed customers will no doubt continue to explore using an SMSF to acquire their business premises,” he says. “Instead of paying rent to a landlord, they’re paying rent into their own fund.”

The logic is appealing: certainty of tenancy and business rent directed towards retirement wealth rather than someone else’s balance sheet. It’s the kind of conversation that opens naturally from a relationship a broker has already built. The commercial lending component isn’t a cold pitch; it’s a practical next step for a client whose goals have moved on. “We’re seeing brokers bringing the lending options into the conversation earlier and pointing their customers to their licensed advisers to explore if it suits their personal circumstances,” Chesworth adds. “Not as an afterthought but as part of a more complete lending discussion, while at the same time, tapping into the customer’s broader advice network.” SMSF lending: a pivot, not a pause One of the clearest changes reshaping this part of the market is the now-legislated ban on new SMSF residential borrowing. For brokers who have built a book of SMSF clients, the residential pathway has narrowed significantly, but the demand for geared exposure to direct property through superannuation hasn’t disappeared. Chesworth sees the change as an opportunity rather than a setback. “As residential options narrow in this space, commercial is becoming a more important pathway for SMSF clients who still want geared exposure to direct property through their fund,” he says. “It puts brokers in a strong position to guide what’s possible from a borrowing perspective and help clients keep moving forward.” One important factor is that recorded non-residential property holdings of SMSFs have long been around twice the size of residential holdings. As at December 2025, SMSFs held $116.7 billion in non-residential (commercial) property and $60.9 billion in residential property, though the full picture is complicated by a further $77.8 billion held in assets acquired through limited recourse borrowing arrangements, which span a range of property types (but no more residential from August) and are not broken down further in ATO data. The data set is muddy, but the evidence indicates that the commercial side of the property story in SMSFs is dominant even without the residential ban. “We feel we will see a back-to-the-future moment, because in 2009, residential property was [worth] one-third of the non-residential assets in SMSFs, and presently it’s over half the value of non-residential property, excluding geared properties,” says Chesworth. For brokers working in SMSF, Chesworth describes the ban as a chance to pivot rather than pause. For those newer to the space, he adds, it’s an opening into a part of the market where client demand is shifting, and the broker who shows up first with a clear understanding of SMSF client needs is likely to be remembered.

Where brokers get stuck, and what changes that The most common barrier to commercial lending isn’t knowledge. “A common hurdle is simply confidence, not capability,” Chesworth says. Commercial deals look more involved from the outside, and it’s natural to hesitate when the documentation and structuring feel like a step up from the residential work a broker already knows well. Bluestone has tried to address that directly. Its commercial property lending is fully integrated into ApplyOnline, and the serviceability approach is designed to feel familiar to brokers who already work with the lender on the residential side. “It means less friction, and more confidence to have the conversation earlier,” Chesworth explains. The experience of doing a few deals is itself part of the solution. “Once brokers get a couple of deals under their belt, confidence builds quickly,” he says. “Commercial becomes less of a stretch and more of a natural extension of their business.” That trajectory, from hesitant to comfortable, tends to happen faster than brokers expect. The first deal feels like a stretch; the third feels routine.

“Self-employed customers will no doubt continue to explore using an SMSF to acquire their business premises”

“Business owners, investors and SMSF clients often have needs that go beyond residential. Commercial and SMSF lending simply provides another way to support those needs and keep the conversation moving”

The ban on new SMSF residential borrowing has sharpened demand for commercial property lending, putting brokers who work with investors and business owners in a strong position to add value

A different kind of client conversation Commercial property clients approach lending differently. They are not simply seeking finance for a property; they are considering cash flow, asset positioning and the longer view. In SMSF scenarios, there is the added complexity of fund structure and the requirement that any transaction between a business and its SMSF be conducted on an arm’s-length basis. Chesworth acknowledges the complexity but frames it as a positive for brokers willing to engage. “These clients tend to take a more strategic view, but their financials are often more complex,” he says. “You’re typically working with self-employed borrowers, business owners or investors who are managing multiple income streams.” Qualitatively different from a standard residential deal, “The conversation moves beyond a single loan and into how lending supports a broader strategy, whether that’s through a business purchase, an investment asset or a commercial property held within super.” That depth of engagement tends to strengthen relationships. A broker who can hold that conversation competently becomes something more than a transactional service provider.

Knowing the boundaries There is one important line brokers need to observe in this space. SMSF lending decisions touch on superannuation strategy in ways that fall outside a broker’s licence. Brokers can’t advise on establishing or investing through an SMSF, and Chesworth is clear that those conversations need to involve appropriately licensed financial advisers or accountants. “Building strong relationships across a client’s broader adviser network helps ensure everyone is working towards the right outcome,” he says. For brokers willing to invest in those professional relationships, it also opens another channel for referrals and collaboration. The distinction matters not just for compliance reasons but for the quality of the client experience. A broker who knows where their role ends, and who to bring in for the rest, is more useful to a client than one who overreaches. Building out from what’s already there Chesworth’s broader point, and the one that threads through the whole conversation, is that commercial lending doesn’t require brokers to reinvent what they do. Sanders, after all, didn’t abandon his recipe. He just started selling the recipe itself rather than the fried chicken. “Most brokers don’t need to look far for opportunity – it’s already within their existing client base,” says Chesworth. “Business owners, investors and SMSF clients often have needs that go beyond residential. commercial and SMSF lending simply provides another way to support those needs and keep the conversation moving.” The upside for brokers who lean in, Chesworth argues, is straightforward: more meaningful conversations, stronger client relationships and additional revenue, without starting from scratch. “It’s about expanding on it in a way that feels natural and genuinely valuable for their clients,” he says. For a profession always looking for a recipe for success, it turns out one of the most promising opportunities is already in their hands.

Published 24 Aug 2026

Source: ATO Self-Managed Super Fund Statistical Report, December 2025

Non-residential dominate SMSF holdings

December 2024

March 2025

June 2025

September 2025

December 2025

20,000

40,000

60,000

80,000

100,000

120,000

116,742

Non-residential ($m)

Residential ($m)

60,896

58,951

113,015

57,554

110,335

56,215

107,770

55,524

106,445

Richard Chesworth, Bluestone Home Loans

Source: MFAA Industry Intelligence Service report, 19th edition

Oct 2019-Mar 2020

1,000

2,000

3,000

4,000

5,000

6,000

5,864

Number of brokers

Proportion of total

Brokers also writing commercial loans

7,000

8,000

Apr 2020–Sep 2020

Oct 2021–Mar 2022

Oct 2020–Mar 2021

Apr 2021–Sep 2021

Apr 2023–Sep 2023

Apr 2022–Sep 2022

Oct 2022–Mar 2023

Oct 2023–Mar 2024

Apr 2024–Sep 2024

4,486

4,539

4,727

5,268

5,369

6,118

7,023

5,654

6,755

31.5%

30.7%

28.5%

30.1%

31.8%

28.8%

27.9%

27.5%

27.3%