One in five SMSF holders have a mortgage through their fund: Genworth

The appeal of acquiring residential investment property by borrowing through a self-managed super fund (SMSF) has been revealed in the latest Genworth Homebuyer Confidence Index.

The report found that almost one in ?ve (18%) of surveyed SMSF holders have a mortgage through their fund, with the majority of these mortgages (75%) secured on residential property.

Among those who don’t have a mortgage on a residential property through their fund, a quarter would consider taking one out, and a quarter of those without commercial property would consider taking out a mortgage on a commercial property through their fund, Genworth found.

Property makes up about 15% of the total value of assets held by Australian SMSFs, the majority of which is made up of Australian property (less than 1% is made up of overseas property), according to ATO figures.

The value of residential property held in SMSFs grew by 12.3% in the year to December 2012.

The Genworth report also found that just over half (59%) of all mortgages were held in multiple member funds - multiple member funds make up the majority of all SMSFs, with most being two member funds, according to ATO data.

The most recent ATO figures for the December 2012 quarter reveal the  growing popularity of SMSFs with around 7,000 new SMSFs established over this period.

The ATO revealed this week it expects more than 1,000 applications a week to be lodged for SMSFs in May and June this year.

Almost 950,000 Australians are now members of an SMSF.