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ISCOVER
Staff Reporter
Self-managed super funds are dominating the real estate market in certain areas, new research has revealed.
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According to new data by Raine and Horne, SMSF’s represent up to 50 per cent of real estate sales in some areas of Sydney and the Hunter region.
“It’s fair to say that since the laws changed back in 2007, allowing self-managed super funds to borrow funds to acquire residential property, we’ve seen more DIY funds looking to secure housing assets in some markets across Australia,” Raine and Horne’s Angus Raine said.
According to the Australian Taxation Office, SMSFs held $10.825 billion worth of assets in residential property in June 2008 – and $14.868 billion by March 2012.
“This is a significant increase, however, according to the ATO, Australia’s 468,000 SMSFs hold around $416 billion worth of total investments, which means only 3.5 per cent is invested in residential real estate,” Mr Raine said.
“I’d be urging more SMSFs to consider borrowing to buy a quality, well-located residential rental property because it can deliver long term capital growth and income, and using a DIY super structure, it’s possible to buy a house or apartment with pre-tax dollars.
“Furthermore, if the fund decides to sell the property in the pension phase it is capital gains tax free.”
But Mr Raine warned that buying a residential property through a SMSF is not for everyone
“I’d urge investors to talk to an accountant and/or financial planner before making a decision to secure a property through a DIY super fund.”
Jason Maxwell, principal of Raine & Horne Newcastle, said many SMSF investors have their eyes on residential and commercial property sectors.
“We’ve seen investors with a high level of financial maturity purchase in the commercial and residential property sectors of Newcastle.”
