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
Millennials believe first home buyers need more support
Australia’s up-and-comers in the housing market say more needs to be done to slow rising house prices. ...Read more
Property
3 in 4 borrowers in trouble are in lockdown: ANZ
Despite offering support, ANZ said freezing home loan repayments will be the last resort, as three in four requests for support stem from NSW. ...Read more
Property
RBA gives APRA’s use of macro tools a tick of approval
Ahead of an expected move to impose tougher lending rules on the banks, the Reserve Bank has looked into previous attempts by APRA to cool the housing market. ...Read more
Property
Federal incentives are driving more first home buyers into the market
While property prices continue to grow, new research suggests that the government’s current crop of first home buyer incentives is having an impact on this segment of the market. ...Read more
Property
Why it now costs 130% more to service a mortgage than 3 decades ago
The lifetime cost of owning a home has increased by over 130 per cent in just three decades, new research has revealed. ...Read more
Property
Using the 30/30/3 rule for home buying during uncertain times
Thinking of buying a home? Uncertain economic times may have you double guessing your purchase, but the 30/30/3 rule can help you make this a reality. ...Read more
Property
Rental yields reach decade high, but not all markets move at the same pace
Changing consumer preferences towards lifestyle destinations and a lack of supply have led to record national price growth, albeit price fluctuations vary region-to-region, fresh figures show. ...Read more
Property
What younger Australians are getting wrong about home loans
As young Australians look to fight the odds and take their first step onto the property ladder, more and more are making easy mistakes. ...Read more
The Olympic effect on property and equity investors; COVID-19 Disaster Payments and super
Listen now
Do lockdowns boost property prices? Are short-sellers levelling the playing field? Did you lodge your tax returns early?
Listen now
Will lockdowns halt the housing boom? Is the metaverse taking over? And the cons of lodging your tax returns early
Listen now
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Property
Millennials believe first home buyers need more support
Australia’s up-and-comers in the housing market say more needs to be done to slow rising house prices. ...Read more
Property
3 in 4 borrowers in trouble are in lockdown: ANZ
Despite offering support, ANZ said freezing home loan repayments will be the last resort, as three in four requests for support stem from NSW. ...Read more
Property
RBA gives APRA’s use of macro tools a tick of approval
Ahead of an expected move to impose tougher lending rules on the banks, the Reserve Bank has looked into previous attempts by APRA to cool the housing market. ...Read more
Property
Federal incentives are driving more first home buyers into the market
While property prices continue to grow, new research suggests that the government’s current crop of first home buyer incentives is having an impact on this segment of the market. ...Read more
Property
Why it now costs 130% more to service a mortgage than 3 decades ago
The lifetime cost of owning a home has increased by over 130 per cent in just three decades, new research has revealed. ...Read more
Property
Using the 30/30/3 rule for home buying during uncertain times
Thinking of buying a home? Uncertain economic times may have you double guessing your purchase, but the 30/30/3 rule can help you make this a reality. ...Read more
Property
Rental yields reach decade high, but not all markets move at the same pace
Changing consumer preferences towards lifestyle destinations and a lack of supply have led to record national price growth, albeit price fluctuations vary region-to-region, fresh figures show. ...Read more
Property
What younger Australians are getting wrong about home loans
As young Australians look to fight the odds and take their first step onto the property ladder, more and more are making easy mistakes. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
