SPECIAL REPORT: The SMSF borrowing ban + SpaceX vs Buffett

Hi everyone,

Hope you’ve had a good week.

Before we dive in, a quick plug: the current season of my TV series, Your Money & Your Life, is screening now on Channel 7 at 1pm Fridays, with repeats on 7Two at 12.30pm Sundays and 9am Thursdays. I’d love you to tune in.

Now to this newsletter, and we start with a genuine surprise: the Federal Government has moved to ban self-managed super funds from borrowing to buy residential property. There’s a short version in this newsletter with the must-knows, but I’ve also pulled together a full special report at the very end for those of you who are affected and have been blindsided by this change. Don’t miss it.

Lots of other news to cover, so let’s get into it.

In this week’s newsletter:

• Your home has quietly made you a fortune: a record share of homes resold last quarter sold for a substantial profit.

• But the property market is tapping the brakes: auction clearances and home-loan enquiries are cooling fast.

• Inflation is still hot underneath: the headline rate is easing, but the underlying measure is creeping up.

• Household balance sheets are in great shape: record net worth, solid spending and low unemployment give the Reserve Bank little reason to cut.

• The truth about migration: “skilled” arrivals are only about a fifth of the intake.

• The short story: borrowing to buy property inside your SMSF banned.

• Tax-time tip: don’t rush to lodge your return the moment the clock ticks over to 1 July.

• A tale of two investors: SpaceX’s wild ride versus Warren Buffett’s patient billions.

• SPECIAL REPORT: Super shock: the door slams on borrowing to buy property in your SMSF.

This newsletter is brought to you by TermPlus

Your home has quietly made you a fortune

Let’s start with the good news ... and there’s a lot of it.

The latest Pain & Gain report from property data house Cotality analysed almost 101,000 homes resold in the first three months of this year. The headline figure is extraordinary: 96 per cent sold for a profit. That's the highest rate of profitable resales since 2005, with the typical gain reaching a record $377,000. For the minority who sold at a loss, the typical hit was $45,000.

In plain English: if you sold a home in the March quarter, you very likely walked away with a sizeable cheque. In fact, the typical profit was the biggest on record.

But ... and this is the bit I really want you to take away - those gains have almost nothing to do with today’s market. They were built up slowly, over years.

As Cotality’s head of research Gerard Burg puts it, the strong resale results “largely reflect the substantial value growth accumulated over recent years rather than current market conditions.”

The proof is in the holding periods.

The homes that sold at a profit had been owned for about 9.1 years on average. The ones that sold at a loss? Just 4.3 years ... meaning many were bought near the market peak in late 2021 and early 2022, just before prices wobbled. Same country, same quarter, completely different outcome, and the difference came down to time.

Where you owned mattered too.

Brisbane was the standout, with a remarkable 99.8 per cent of resales turning a profit and a median gain of $525,190. Adelaide was hot on its heels at 99.3 per cent and a $477,000 typical gain, and Perth was close behind at 98.9 per cent and $475,000.

These mid-sized capitals have been the engine room of the property boom, as buyers priced out of Sydney and Melbourne went hunting for value.

There was a clear winner between houses and units, as well.

Nationally, 98.1 per cent of house resales made money, with a typical gain of $440,000, compared with 91.9 per cent of units at a more modest $256,000. Melbourne’s unit market was the weakest in the country, with only 81 per cent of apartment sales turning a profit - a reminder that a glut of new apartments can really weigh on prices.

Now for the dose of reality. These are backward-looking numbers, a snapshot of the boom years, not a forecast. Cotality’s own figures show national home values flatlined in May, and prices are now actually going backwards in Sydney and Melbourne. So if you’re banking on these kinds of gains continuing automatically, don’t.

The property market is tapping the brakes - and so are the states’ coffers

If the Pain & Gain report is the rear-view mirror, here’s the windscreen ... and the road ahead is slowing.

A handful of charts and figures crossed my desk this week that all tell the same story.

Let’s start with the auction room:

According to Cotality, the combined capitals clearance rate fell to just 42.3 per cent in the week ending 21 June – the lowest result of 2026 so far, and the weakest since 26 April 2020, when the market was in the grip of the first COVID lockdowns.

Since Cotality’s records began in 2008, clearance rates have only been this soft three times: the downturns of 2011 and 2018, and the early pandemic. Tellingly, this isn’t a one-week blip ... the four-week trend has been sliding since February. In Sydney, more than a quarter of homes listed for auction (27.7 per cent) were pulled before the hammer even fell, a sign vendors increasingly don’t want to test a cooler market.

It’s the same picture further up the pipeline. Westpac’s economics team, using Equifax data, shows home loan enquiries have been sliding since the Federal Budget, down 4.3 per cent on a four-week trend.

And IFM Investors, drawing on Cotality and ABS numbers, has capital city price growth slipping into reverse (around -1.6 per cent annualised) while the number of homes changing hands keeps easing. Fewer people are buying, and prices have stopped racing ahead.

Now here’s the bit most people don’t think about … Every time a house is sold, state governments clip the ticket through stamp duty - and it’s one of the biggest sources of money our states have.

So when sales volumes and values drop, it’s not just buyers and sellers who feel it - state treasurers do too.

The states most hooked on property turnover? New South Wales and Victoria tend to feel the pinch hardest, while mining states that lean more on royalties, like WA and Queensland, are better cushioned. Something to watch as the state budgets roll out.

What it means for your money: If you’re a buyer, the balance of power is tilting your way - less competition and more motivated sellers means more room to negotiate, especially at auction. If you’re selling, price sensibly. The days of naming your number and watching buyers scrap over it have paused.

And keep half an eye on your state’s budget, because softer property turnover quietly drains the stamp-duty pool that funds schools, hospitals and roads.

Heads up: Inflation is back above the Reserve Bank’s comfort zone

The latest monthly inflation figures landed this week, and they’re a timely reminder that the cost-of-living battle isn’t won just yet.

According to the Australian Bureau of Statistics, the Consumer Price Index rose 4 per cent over the year to May, down a little from 4.2 per cent in April, but still sitting well above the Reserve Bank’s 2–3 per cent target band.

Here’s the catch, though. That headline number is being flattered by one thing in particular: petrol. Automotive fuel prices fell 11.9 per cent in May alone, helped along by the halving of the fuel excise on 1 April and cheaper world oil.

Now strip out that noisy item and look at the trimmed mean, which is the Reserve Bank’s preferred measure of underlying inflation, and it actually nudged up to 3.6 per cent, from 3.4 per cent in April. This means the engine of inflation is still running a little hot.

So what’s causing the damage? Housing remains the big driver, up 6.5 per cent over the year.

But the standout is electricity, which is now 21.1 per cent higher than a year ago after Commonwealth and state energy rebates rolled off.

Food and non-alcoholic beverages rose 3.3 per cent (with meals out and takeaway up 4 per cent), while transport also lifted 3.3 per cent, despite cheaper petrol.

With underlying inflation creeping back up and power bills jumping as the rebates disappear, don’t count on the Reserve Bank rushing in to cut interest rates. The headline figure is heading in the right direction, but the Reserve Bank watches that trimmed mean ... and right now, it’s moving the wrong way.

As for your household budget, electricity is the line to watch: if you’d been leaning on a government rebate to keep the bill down, that cushion is gone, so it’s well worth comparing energy plans and locking in the sharpest deal you can find.

Australia’s household balance sheets are in great shape - and the Reserve Bank is watching

Here’s the reason the Reserve Bank isn’t in any rush to cut interest rates, as told in three charts from IFM Investors using ABS data.

The first is the household balance sheet. And it’s a picture of remarkable strength:

Australian households now hold a staggering $22.67 trillion in assets, against just $3.45 trillion of debt, leaving net worth at a record $19.21 trillion. Put simply, for every dollar households owe, they’re sitting on more than six dollars of assets.

Most of that wealth is exactly where you’d expect: the family home (residential land and dwellings make up about 57 per cent of all household assets) and superannuation (around 20 per cent).

Yes, household debt is still high against income - about 192 per cent of disposable income - but it’s dwarfed by an asset pile worth more than twelve times our annual income.

When people feel wealthy, they spend. And the second chart below shows exactly that:

IFM’s monthly household spending indicator is running 5.5 per cent higher than a year ago, comfortably above both the pre-pandemic average of 3.4 per cent and the post-pandemic average of 4.0 per cent.

The growth is being led by services. Think travel, dining out and health. While goods spending has been flatter.

Tellingly, it’s not just the essentials. Discretionary, or “nice to have” spending is rising too. Households aren’t battening down the hatches, they’re still happily opening their wallets.

And the reason they feel comfortable enough to do so is this third chart: jobs:

Unemployment is sitting at just 4.36 per cent, well below its post-2010 average of around 5.1 per cent.

The Reserve Bank’s own May forecasts have it drifting only gently higher, to about 4.7 per cent by 2028. In other words, the RBA expects the jobs market to stay tight for years yet.

When almost everyone who wants a job has one, people keep spending.

So what does all this tell the RBA? Put the three charts together - rock-solid balance sheets, spending running above its long-run pace, and unemployment below average - and you have an economy with plenty of momentum and very little spare capacity.

That is not the backdrop of an economy crying out for lower interest rates. Coupled with underlying inflation creeping back up, as we saw earlier, it’s a recipe for a Reserve Bank that stays patient and keeps rates where they are.

The truth about our immigration numbers

Immigration gets blamed for just about everything these days … house prices, rents, traffic, you name it. But ABS data shows most of us have the wrong picture of who’s actually arriving, and how much the make-up of the intake has changed.

Let’s look at the big number first: Net migration has come down from its post-COVID spike of around 550,000 to roughly 301,000. So the headline pressure has already eased considerably. But the real surprise is in the composition.

The much-talked-about “skilled” immigrants - that is, the engineers, nurses and tradies we say we need - are a surprisingly small slice. Permanent skilled arrivals run at about 28,000 a year, with temporary skilled at about 33,000. Even combined, “skilled” totals around 60,000 people, or roughly a fifth of the total.

So who makes up the rest? Overwhelmingly, it’s students and short-stayers.

International students are the single biggest driver, with a net intake of around 96,000. Then come working holidaymakers (a net 48,000 or so) and New Zealanders hopping across the ditch on the special category visa (a net 37,000).

In other words, our immigration program is powered far more by classrooms and backpackers than by the skilled visa holders who dominate the political headlines.

Super shock: the door is closing on borrowing to buy property in your SMSF

The government has quietly changed one of the big rules of self-managed super - and if you were planning to borrow to buy a rental inside your fund, the window is closing fast.

Here’s a summary, but if this impacts you, I have gone into much more detail in a special report at the end of this newsletter.

The short version:

SMSF are now banned from borrowing to buy residential property. This means super funds can no longer take on debt to buy a housing asset.

Existing loans are fully grandfathered, though. So if you already have an SMSF property loan, nothing changes.

Contracts signed before the law starts are safe, with a 45-day transition for deals already underway.

The law will not apply to commercial property - SMSFs can still borrow to buy business premises.

The start date is around mid-August 2026, roughly 45 days after the bill receives royal assent.

As to why this happened and who said what and what to do if you are affected, please read my in-depth report at the end of this newsletter.

Tax time tip: don’t rush your return

The end of the financial year is almost here, which means a familiar temptation is about to strike: lodging your tax return the very second the clock ticks over to 1 July. My strong advice, and it’s backed by the Tax Office itself, is don’t.

The ATO is actively urging people to hold off. The reason is simple - if you lodge too early, before all your information has been automatically loaded in, you’re far more likely to make a mistake.

And the numbers back it up: the ATO says people who lodged before their pre-fill information was ready last year were more than twice as likely to have their return amended.

How much gets corrected? A lot. The Tax Office’s assistant commissioner Anita Challen says that across the 2024–25 financial year, the ATO corrected more than 140,000 individual returns for discrepancies in things like employment income, interest, dividends, government payments, Medicare levy exemptions and private health insurance. On top of that, its data-matching program adjusted more than 595,000 returns for missing income, overstated deductions and other errors.

The fix is easy: wait. By late July, the ATO has usually pre-filled most of your details - your wages, bank interest, dividends, government payments and private health information all loaded in automatically. Lodge then, check it’s all correct, and you dramatically cut your chances of a “please explain” letter down the track.

A tale of two investors: SpaceX’s wild ride and Buffett’s boring billions

Here’s a story that’s part entertainment, part lesson. It comes from two cracking charts the team at Equity Mates put together, and side by side they capture just about everything you need to know about investing.

First, the rocket. SpaceX’s recent sharemarket float was the biggest in history - at listing it was valued at around US$1.75 trillion. To put that in perspective, that’s roughly the same as every other listed aerospace company in America combined - Boeing, Lockheed Martin, RTX, GE Aerospace, Honeywell, Northrop Grumman … the lot.

One company worth as much as the entire rest of the industry. In the three days after listing it added another US$910 billion on top.

And then gravity did its thing.

This week SpaceX shares fell more than 16 per cent in a single session - their steepest drop since debut - as part of a sharp pullback that wiped out hundreds of billions in value, after the company announced it was raising debt to fund its artificial-intelligence ambitions. (For all the drama, the shares are still above their float price - but ouch.)

Now the tortoise.

The second chart laid out Warren Buffett’s ten longest-held stocks, and the holding periods are measured in decades: Coca-Cola 34 years, American Express 29, Moody’s 22.

The standout fact? Buffett’s Coca-Cola shares now pay him more in dividends every single year than he originally paid to buy them. He didn’t get rich by trading in and out of the hottest thing going around. He got rich by buying good businesses and sitting on his hands for thirty-odd years.

What we can learn

The investment tales remind me of Australia’s property story, just with a rocket attached.

The headlines belong to the hype - but the wealth, more often than not, belongs to the patient. Whether it’s a house held for nine years or a Coke share held for thirty-four, time in the market beats timing the market almost every time.

Real wealth is usually built quietly and slowly - in bricks and mortar you’ve owned for years, or in shares you’ve held through thick and thin.

The exciting, fast-money headlines make for great television, but they’re rarely where ordinary people actually get ahead.

Do the boring things well - be patient, don’t rush your tax return, get proper advice - and your money will mostly look after itself.

Until next week, look after yourselves and your money. If you are interested in my SMSF special report, read on.

SPECIAL REPORT: Super shock: the door slams on borrowing to buy property in your SMSF.

Every now and then a policy lands out of the blue and catches everyone on the hop. This week we got one.

On Tuesday, Prime Minister Anthony Albanese and Treasurer Jim Chalmers confirmed the government will ban self-managed super funds (SMSFs) from borrowing to buy residential property.

It wasn’t in the budget, the housing industry says it wasn’t consulted, and as recently as last year, Labor insisted it had “no intention” of doing exactly this.

So what changed - and what does it mean for your money?

SMSFs borrowing ban

The announcement came from left field - and it certainty raised eyebrows.

A detailed analysis from mortgage lender WLTH landed on my desk, describing the move as “political virtue signalling, not policy.” That’s a big call, considering WLTH has a dog in the fight … but the numbers it lays out are worth a look.

Let me walk you through what’s actually happening, who it hits, and what you can do about it.

What’s actually changed?

First, let’s be precise, because the headlines have been loose.

Your SMSF is not banned from owning residential property. What’s being banned is borrowing to buy it - specifically, new “limited recourse borrowing arrangements” (LRBAs).

These are the one exception to the general rule that super funds can’t take on debt: an LRBA lets a fund borrow to buy a single asset, usually a property, held in a separate trust until the loan is repaid.

The key details, as confirmed by the PM’s office and Treasurer Chalmers:

• What’s banned: new LRBAs to buy residential property inside an SMSF - both established and brand-new homes.

• Existing loans: fully grandfathered. If you already have an SMSF property loan, nothing changes.

• Deals in train: contracts signed before the law starts are safe, with a 45-day transition period for arrangements already underway.

• Commercial property: unaffected. SMSFs can still borrow to buy business premises - a big deal for small business owners.

• Start date: around mid-August 2026, roughly 45 days after the legislation receives royal assent. The bill is expected to pass before Parliament rises for the winter break.

Why it happened - follow the Senate maths

This wasn’t a housing policy. It was a price tag.

To get its bigger tax package - the changes to the capital gains tax discount and negative gearing - through the Senate, the government needed the Greens.

The Greens’ condition was closing what they call a “loophole” that let wealthier investors use super to keep buying tax-advantaged property. The SMSF borrowing ban was the deal.

Here’s the kicker, and both sides actually agree on it: this won’t move the dial on house prices.

By the government’s own numbers, SMSFs account for less than 1 per cent of residential property borrowing, and under half a per cent of new lending each year. The measure is forecast to improve the budget by about $50 million over four years - a rounding error next to the multi-billion-dollar tax package it helped pass.

The government points to the 2014 Murray Financial System Inquiry, which warned about the risks of borrowing to invest inside super, as justification.

The consequences? Who really gets caught

The Greens framed this as hitting “wealthy property investors.” The data tells a more everyday story.

According to ATO figures cited by SMSF specialists, borrowing to buy property has been most common in funds with balances between $500,000 and $1 million - solid, but hardly the big end of town.

Meg Heffron, managing director of SMSF firm Heffron, points to a group many of us would recognise: young, high-earning couples who, thanks to compulsory super, have built up a decent balance inside super but relatively little outside it. For them, an SMSF was one of the few doors left into the property market.

The SMSF Association’s chief executive, Peter Burgess, was blunt - he said the sector wasn’t consulted, and that “review after review has found LRBAs pose no material risk to the superannuation system.”

If dodgy property spruikers are the real problem, his argument runs, then go after the spruikers - don’t shut the door on everyone.

WLTH’s analysis also adds a supply angle worth chewing on. Because SMSF members aren’t allowed to live in a property their fund owns, every one of those buyers is, by definition, a landlord providing a rental. Remove them from the new-build market, WLTH argues, and you may quietly remove future rental supply - an odd outcome for a policy sold under the banner of easing the housing crisis.

It also notes commercial property already makes up a far bigger slice of SMSF assets (around 11 per cent) than residential (around 6 per cent), so most fund money was never in housing to begin with. Treat WLTH’s framing as one (interested) view - but the supply point is a fair one to raise.

What SMSF trustees can do about it

If this affects your plans, here’s the practical rundown. (And here is my usual caveat: I’m not a financial adviser, and SMSF structuring is genuinely technical — get licensed advice before you act.)

• Already have an SMSF property loan? Do nothing. You’re grandfathered.

• Mid-purchase right now? Move quickly. The contract date is the trigger, not settlement — so exchanging contracts before the law starts protects the deal. Don’t dawdle: when a similar ban was floated in 2019, the big banks pulled their SMSF loan products before any law passed. The product you need may vanish before the deadline does.

• Want property in super without a residential loan? Buying outright with the fund’s own cash is unaffected, and borrowing to buy commercial property (including your own business premises) is still allowed. Advisers also point to structures such as unit trusts and tenants-in-common arrangements - all of which need careful, specialist setup.

Quietly, super just got more attractive in one way: specialists note that after the Budget’s changes, an SMSF may become one of the few structures where you can still negatively gear the purchase of an existing residential property. One door closes, another stays ajar.

The bottom line

Strip away the politics and here’s where it lands:

If you already own property in your SMSF, relax - nothing changes. If you were planning to borrow to buy a home inside super, your runway is now measured in weeks, not years, so get advice fast. And if you’re just watching from the sidelines, file this one under “how Senate deals quietly reshape your retirement rules.”

It raises $50 million, won’t build a single house, and rewrote nearly two decades of settled super policy in a single morning … Whatever you think of it, it’s a reminder to keep one eye on Canberra - because the rules of the game can change overnight.