SMSFs spending on housing up 11%: ASIC
Investment in residential property through self-managed superannuation funds has risen 11% in the past year.
The big increase in property investment by SMSFs is revealed by the Australian Securities and Investments Commission in its submission to the latest parliamentary inquiry on home ownership.
"As at March 2015, the value of residential real property investments through SMSFs was $21.78 billion … up from $19.49 billion … in March 2014," the ASIC submission said.
Despite the growth, residential property still makes up less than 4% of total Australian and overseas assets held by the 500,000 SMSFs.
The Reserve Bank of Australia also observed that "although the share of the housing stock owned by these funds is small, it has grown quickly".
Since the law changed in 2003 to allow SMSFs to borrow money, concern has increased about the influence of the small super funds on the housing market.
SMSFs are the fastest growing sector of the superannuation industry and investment in property through SMSFs is consequently also growing, ASIC noted.
As at March 2015, the value of residential real property investments through SMSFs was $21.78 billion, or 3.7% of total Australian and overseas assets, up from $19.49 billion, or 3.6% of total Australian and overseas assets, in March 2014.
"There has been an increase in investment in residential real property through SMSFs of 11.78% from March 2014 to March 2015, and an increase of 58.69% since March 2011.
"ASIC’s primary role in relation to SMSFs is to regulate the gatekeepers—the financial planners, accountants, auditors and providers of products and services to SMSFs.
"We want to ensure that those who are advising retail clients about establishing and investing through SMSFs are providing good quality advice.
"We consider that gatekeepers have a critically important role in ensuring the overall health of the SMSF sector is sound.
"ASIC has publicly warned investors about misleading advertisements regarding the use of SMSFs.
"ASIC has also taken regulatory action in relation to the promotion of investment in residential property through SMSFs in a number of instances, including Money Choice, Charterhill and Park Trent," the submission noted.
