There has been a lot of commentary in the newspapers recently discussing the potential for self-managed superannuation funds to push up housing prices. But the facts don't yet match the hype. The overall exposure of SMSF's to property is only moderately higher than institutional funds, and its actually 75% in commercial property, meaning less than 5% of SMSF assets are currently invested in housing.
Of course it is a shift in allocations that moves prices, not the absolute level. An allocation shift from 5% to 20% would mean tens of billions of dollars of residential property demand.
More of a concern, though, is the SMSFs' higher allocation to cash and almost non-existent allocation to foreign equities. Over the long term, this is more likely to hamper returns than a 10% allocation to residential property.
The higher allocation to 'other' is concerning too. Whereas the institutions are investing in unlisted infrastructure, private equity and hedge funds, the 'other' money in SMSFs is probably invested in art or a friend's small businesses. There are going to be plenty of disaster stories in the SMSF space, but I'm not sure residential property should be the main area of concern.
Functional cookies Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.