Invest
Could commercial property be SMSFs’ new darling?
Investing off-the-plan may be off the table for SMSFs but commercial property could step up to fill the gap, a property lender has said.
Could commercial property be SMSFs’ new darling?
Investing off-the-plan may be off the table for SMSFs but commercial property could step up to fill the gap, a property lender has said.
SMSF trustees are increasingly finding the commercial property market an attractive space, the CEO of commercial property lender Thinktank has said.
According to Jonathan Street, it’s the result of falling interest in the residential market coupled with growing understanding of the commercial business sector as actual owners or occupiers.
“Commercial property can also play a significant role as part of a retirement planning strategy for many small business people,” he said.
“In our experience many SMSF trustees, as owners of small to medium businesses (SMEs), have direct involvement with commercial property and as such appreciate the investment opportunities this property sector offers.”
These same investors are witnessing a burgeoning apartment oversupply.
“While concerns are expressed by the regulators about ‘small-sized’ SMSFs investing in residential property, often through off-the-plan purchases, our experience suggests there is more informed interest in commercial property,” Mr Street continued, adding that business owners are afforded extra protection given the equity in owner-occupier premises is protected from creditors or administrators.
However, he also noted government concern about SMSFs’ use of limited recourse borrowing arrangements (LRBAs) to purchase property.
“Often mentioned in any analysis of SMSF portfolios is the growth in LRBAs that have gone from a modest $2.5 billion in June 2012 to $31.4 billion in December 2017,” he said.
“While this rate of growth received a lot of attention in the Murray Financial System Inquiry, it largely ignored the small percentage that it represents of total SMSF assets. These LRBAs are secured mostly by direct property, both residential and non-residential, and of these assets it represents only 19.2 per cent.”
Mr Street anticipates SMSF interest in this sector is set to grow, as the advantages are substantial in Australia’s weak growth environment.
His words come as the CEO of property research group RiskWise calls for SMSFs to reconsider their off-the-plan purchases and Westpac backs away from SMSF lending.
Property
RBA’s 30% property growth forecast to materialise in 75% of regions
Experts believe that RBA’s forecasted 30 per cent growth in property prices over the next three years will materialise in 75 per cent of Aussie regions. ...Read more
Property
HomeBuilder applications soar as first-timers enter the market in record numbers
Record numbers of first home buyers are coming into the market assisted by the government’s HomeBuilder stimulus, which is expected to help spur $50 billion in economic activity. ...Read more
Property
Dual Occupancy Homes – Why They Are A Smart Investment In The Current Market
Promoted by Metricon ...Read more
Property
4 factors affecting property market trends in 2021
Following a tough 2020, property investment activity is expected to rebound strong, expanding by 50 per cent in the second half of 2021. ...Read more
Property
House prices tipped to surge 30% on the back of cheap money
According to new documents released from the Reserve Bank of Australia, persistently low interest rates could push up property prices by as much as 30 per cent. ...Read more
Property
Double-digit price growth to stick around as ‘property boom’ arrives
According to leading indicators, Australia’s property boom officially began in November, following several slow months on the back of the COVID crisis, with double-digit price growth already logged ...Read more
Property
How to turn your ‘costly’ lifestyle investment into a money-making asset
Emotionally driven holiday home buyers are being advised to seek maximum rental income and depreciation benefits to make their investments viable. ...Read more
Property
Dutch e-commerce giant VidaXL ramping up Australian operations
Netherlands-based online retailer VidaXL is ramping up its operations in Australia, by launching the build of a brand new 81,000 sq m national distribution centre in Melbourne. ...Read more
Property
RBA’s 30% property growth forecast to materialise in 75% of regions
Experts believe that RBA’s forecasted 30 per cent growth in property prices over the next three years will materialise in 75 per cent of Aussie regions. ...Read more
Property
HomeBuilder applications soar as first-timers enter the market in record numbers
Record numbers of first home buyers are coming into the market assisted by the government’s HomeBuilder stimulus, which is expected to help spur $50 billion in economic activity. ...Read more
Property
Dual Occupancy Homes – Why They Are A Smart Investment In The Current Market
Promoted by Metricon ...Read more
Property
4 factors affecting property market trends in 2021
Following a tough 2020, property investment activity is expected to rebound strong, expanding by 50 per cent in the second half of 2021. ...Read more
Property
House prices tipped to surge 30% on the back of cheap money
According to new documents released from the Reserve Bank of Australia, persistently low interest rates could push up property prices by as much as 30 per cent. ...Read more
Property
Double-digit price growth to stick around as ‘property boom’ arrives
According to leading indicators, Australia’s property boom officially began in November, following several slow months on the back of the COVID crisis, with double-digit price growth already logged ...Read more
Property
How to turn your ‘costly’ lifestyle investment into a money-making asset
Emotionally driven holiday home buyers are being advised to seek maximum rental income and depreciation benefits to make their investments viable. ...Read more
Property
Dutch e-commerce giant VidaXL ramping up Australian operations
Netherlands-based online retailer VidaXL is ramping up its operations in Australia, by launching the build of a brand new 81,000 sq m national distribution centre in Melbourne. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
