Self managed super funds (SMSFs) are set to become as important to property investment as negative gearing, according to a leading economist.
Speaking to Smart Property Investment, Australian Property Monitors (APM) senior ecThe popularity of SMSFs is soaring, Australian Property Monitors told Smart Property Investmentonomist Dr Andrew Wilson said SMSFs are growing in popularity and are a significant option for investors.
“It’s a very interesting development here and it is certainly something that is growing, and is something that the general public is becoming alert to now,” Mr Wilson said.
“It is an important thing, I think it is a critical thing and its significance in the marketplace in my mind is it is as significant as the negative gearing type of tax provisions that we have for residential investments,” he said.
Approximately 250,000 self managed funds currently exist in Australia, with new funds being set up at an average rate of 2000 a month, according to the Self Managed Super Fund Professionals Association of Australia (SPAA).
A recent survey conducted by Smart Property Investment found that of the 161 surveyed, only 31 per cent claimed to have a SMSF. Of those that did, 68 per cent invested in residential property, 30 per cent in commercial property and 65 per cent in Australian shares using their SMSF.
Seventy three per cent of people who do not currently have a SMSF plan to get one in the future.
Of those, 92 per cent wish to invest in residential property, 34 per cent in commercial property and 40 per cent in Australian shares.
“There is growing momentum and growing demand and I think it is a certainty that we will have significant growth in self managed funds and significant interest in the investment of those funds in residential property this year,” Dr Wilson said.
For more information about SMSFs, pick up the latest issue of Smart Property Investment, on newsstands today.