Macquarie Bank’s decision to pause lending to companies and trusts should prompt others to ‘take stock and review’ their exposure, according to a property investor association.
The Property Investors Council of Australia (PICA) has urged lenders to reassess their exposure to trust, company, and self-managed super fund (SMSF) lending in residential property following Macquarie Bank’s decision to pause lending in this sector.
Last week, Macquarie Bank wrote to mortgage brokers explaining that it would pause all new lending to trusts and companies from 31 October 2025.
The lender said that it was changing its approach to trust and company loans for a range of reasons, including:
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To maintain fast turnaround times and high service levels as applications rise.
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To respond to the emergence of social media strategies aimed at maximising lending through trusts and companies.
- Get ahead of incoming anti-money laundering regulations that will require additional verification steps and make these loans more complex to process.
Indeed, there have been growing calls for lenders, associations, and regulators to crack down on a concerning surge of speculative marketing, conflicted conduct, and unlicensed financial advice emerging in the property investment space.
Earlier this year, the Property Investors Council of Australia (PICA) – a not-for-profit association representing property investors – flagged that some players may be encouraging clients to buy property through trusts or SMSFs as a way to fast-track portfolios and bypass APRA’s loan servicing constraints designed to restrict such multiple purchases.
PICA has now welcomed Macquarie Bank’s pause on trust and company residential lending and is urging all lenders to review their exposure and practices, given the level of social media marketing spruiking speculative investments in residential property on the promise of fast capital gains.
PICA chair Ben Kingsley, who is also the managing director of brokerage and financial advisory firm Empower Wealth, flagged that this was particularly a concern for those who are offered unlicensed advice to amass a portfolio of investment properties quickly, while bypassing regulation.
He commented: “I don’t know about you, but if I was a lender operating in this space, I wouldn’t want to be involved with anyone spruiking access to unlimited borrowings to buy multiple properties fast, as part of a ‘get rich quick’ agenda.
“It has all the hallmarks of a genuine problem where lots of consumers are going to get burnt and look out lenders if ASIC steps in.”
PICA acknowledged there is a legitimate place for trust or company structures in property investing – particularly for experienced investors seeking specific asset protection or tax outcomes – but warned that mass promotion of such strategies to unsophisticated consumers represents a growing problem.
“The current level of unfettered promotion offering cookie-cutter advice, combined with relaxed credit assessment rules giving access to unlimited borrowings, is a recipe for the mischievous behaviour we are currently seeing by some operators,” Kingsley said.
“While off a low base, the sharp growth in lending volumes via these entities validates the increasing risks and supports PICA view of concerns re: current shortsighted self interest and potentially the credit assessment oversight going on this space, which – if it continues – introduces real risks for the clients they are meant to be helping and increased financial system integrity risks.”
He added that Macquarie’s decision was a “very positive development” that should prompt other lenders to review their exposure.
Mortgage and finance brokers have also broadly supported the pause, describing it as a “pushback against loophole-driven lending” that should reshape investor behaviour and lending strategies.
However, others have warned that it could limit borrowing options for legitimate investors and create short-term disruption for clients already in the pipeline.
Trust lending has dwindled at the banks in recent years, with some brokers telling The Adviser last year that they were seeing some investor clients with property in trusts being denied discounts or pricing requests.
According to brokers, some banks flatly refused to consider repricing, citing a policy against adjusting rates for investment properties held in trusts. This led to concerns that property investors could be left in a “trust prison”, as they would be unable to benefit from future rate reductions and has seen larger flows being sent to non-bank lenders.
[Related: Can non-banks save investors in ‘trust prison’?]
