Invest
‘Solid growth’ in SMSF residential property investment
The SMSF Professionals’ Association of Australia (SPAA) has highlighted recent statistics indicating growth in SMSF residential property investment and the sector officially reaching its millionth member.
‘Solid growth’ in SMSF residential property investment
Referring to the ATO’s March 2014 SMSF statistical report, SPAA said the data showed investment in residential property rose 17.2 per cent to $20.5 billion in the 12 months to 31 March 2014.
SPAA chief executive Andrea Slattery said that although the figures represented solid growth, it has to be “put into context”.
“Residential property still only represents 3.7 per cent of total SMSF assets of $558.5 billion, and is still dwarfed by non-residential property assets at $68.4 billion or 12.2 per cent of total assets,” she said.
“In addition, most of that growth occurred in the first nine months to 31 December 2013, and was starting to ease in the last quarter,” she added.
Ms Slattery said it was also “interesting to note” that that limited recourse borrowing arrangements (LRBAs) only increased 1.6 per cent in the March quarter.
“[LRBA’s] now stand at $2761 million or 0.5 per cent of all SMSF assets,” she said.
“Again SPAA would suggest this number illustrates that trustees and members are adopting a conservative approach to gearing,” Ms Slattery added.
The report also showed the number of members in the SMSF sector at 1,006,975, a net gain of 11,384 compared with the 31 December 2013 figure of 995,591.
Ms Slattery said the number of members exceeding one million is an important milestone for the SMSF industry.
“[It] clearly demonstrates that there is a growing number of people wanting to take direct responsibility for their retirement savings,” she said.

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