Property downturn hits SMSFs

A downturn in the residential property market has hit self-managed super funds (SMSFs), with a reduction in exposure to the property sector from 19.5 per cent to 18.9 per cent for the June 2018 quarter, according to investment patterns revealed by SuperConcepts.

Phil LaGreca, SuperConcepts executive manager of SMSF technical and strategic services, said it wasn’t just residential property though, and the SMSF provider expected allocations to property to continue falling as access to finance tightens and lenders start to increase their interest rates.

“Forty per cent of the properties owned in the survey used borrowings to buy property and the conditions around that are being tightened,” he said.

LaGreca said a total of 962 residential or commercial properties were owned by the respondents of the survey, with the split being 30 per cent commercial and 70 per cent residential, as compared to 42 per cent commercial and 58 per cent residential based on value.

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