Self-Managed Super Funds Surging Residential Property Prices
With the current economical situation and investors seeking opportunity, Real Estate has slowly turned into a money-making opportunity for investors rather than serving as a home for families. This trend increased in the 1980s when over 1 million Australians owned investment property. This trend may be picking up momentum once again as superannuation investors are entering the property market.
Compulsory superannuation has been around for only 20 years and is still in development. Today there is over $1.4 trillion in superannuation that is locked into retirement. This number is only growing. The share market, which is where some people look to leave their funds anticipating its growth, has only declined and is currently below levels that it was in 2010.
This proves disappointing to those that would anticipate growth in this account and rely on it to retire. This stagnant share market will push investors to seek other opportunities which can be inclusive of the property market. According to the Australian Prudential Regulation Authority, thousands of self-managed super funds (SMSFs) are set up each year. Traditionally, SMSFs have been the province of the self-employed, yet an increasing number of salaried employees are now setting them up too.
The market is around $439 billion and growing immensely, this is also in part to a change in regulations in 2010 that enable gearing into super funds. Residential property is primarily a capital growth-based asset, relative to shares, the property market is rather stable and can provide a solid long-term way to boost the value of SMSFs.