According to a report by ING Direct, Aussies are increasingly turning to property investment to secure their financial future.
It noted that many people believe their superannuation will only account for 35.8% of their retirement nest egg.
ING DIRECT executive director of customers John Arnott said that Australians have a limited belief in their super which is pushing their move into property.
“It all comes down to a fear of the unfamiliar,’’ he said.
“We don’t see or hear about our super every day, so we put our faith in what we know; things like property and savings.”
Propertybuyer.com.au chief executive officer Rich Harvey said investing in property for retirement was nothing new.
“People have been doing that strategy for donkey’s years and will continue to do so,’’ he said.
“Australian property is a very sound asset class for many people and we’ve got many clients that are building their whole retirement strategy on property.’’
While property is a stable asset class, Harvey warned it was not as liquid as some other investment options.
“It’s not a volatile as shares can be. You get both capital growth and income, so it’s better than cash in many ways.’’
‘’The downside is it’s not as liquid. With shares you go online, you get your broker to sell your shares in about two milliseconds and you’ve got cash in your account. To sell your property you’ve got to advertise, get a marketing campaign and it’s a minimum of two months or more before you can get your cash.’’
If people were considering property investment as a means for retirement income, Harvey said there were several things to keep in mind.
- You need a good portfolio.
- The choice of the area and choice of property is critical.
- You want a more set and forget style property.