In a blow to the Albanese government’s plan to deliver 1.2 million new homes by 2029, cautious lenders are shunning larger, more affordable housing projects aimed at first home buyers and focusing instead on funding smaller, luxury developments with bigger profit margins, according to leading commercial mortgage broker Stamford Capital.

The firm’s managing director, Peter O’Connor, told The Australian Financial Review it had a pipeline of projects on its books with a gross end value of $5 billion, but not one of them was an affordable development.