SMSF property investment on the up

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The popularity of investing in property through self-managed superannuation funds (SMSFs) appears to be on the up, judging by the latest statistics from the Australian Taxation Office.

The ATO’s recently released Self-managed superannuation funds: A Statistical Overview report reveals that the percentage of all SMSF assets accounted for by 'real property' rose by just under 2% between 2008 and 2009 – bringing its total share of the SMSF market up to 14.7% ($48.3bn).

With the report also pointing to an increase in the number of young people deciding to set up SMSFs, Self-Managed Super Fund Professionals’ Association of Australia (SPAA) CEO Andrea Slattery believes that this younger demographic’s awareness of the real estate market may continue to boost the popularity of investing in property through SMSFs. 

According to the ATO statistics, 11% of new SMSF members were under the age of 35 in the June 2010 quarter, compared to just over 5% for the whole SMSF member population.

“Those people that are younger are, as an example, looking for their own homes at the moment. And a lot of them are young professionals who are perhaps aware of the property market from a professional point of view,” said Slattery.

She added that property investment is increasingly being seen as something that’s “not only for the very few.”

“It’s a very exciting area, the whole issue of investing in an SMSF, but particularly the property issue is a very exciting area,” said Slattery.

She warned potential investors, however, to seek expert advice from qualified professionals before taking the plunge and investing in property through their SMSF.

Non-residential property takes a front seat

Interestingly, non-residential property outstripped residential when it came to their respective shares of all SMSF assets (11.1% vs. 3.6%). The dominance of non-residential property can be explained in part by the trend for business owners to hold their business premises within their superannuation fund.

“A lot of small business owners put their business property into an SMSF, and that’s part of their superannuation savings,” said Slattery.

Have you invested in property through your SMSF? Share your tips on our property investment forum.

Related video:

Risk and reward: Using your SMSF to invest in property

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Comments
  • Brian says on 17/01/2012 11:41:24 AM

    It's pretty complicated, but from what I've read there are some good tax benefits to SMSF property investing. I wish they'd allow renovations though - that's what puts me off.

  • Rog says on 17/01/2012 11:49:45 AM

    And you need a lot of money in your super to make setting up a SMSF worth it.

  • Matt says on 18/01/2012 03:35:59 PM

    Actually, you do not need a huge superannuation balance these days to purchase a property. You are able to now borrow money in your SMSF to purchase property.

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