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SMSFs drive NRAS boom

By Staff Reporter

The National Rental Affordability Scheme (NRAS) has seen increased interest among buyers, however the largest pick up has been seen in the SMSF sector.

Ethan Affordable Housing managing director, Ashley Fenn, told Smart Property Investment that his company has recorded a 100 per cent increase in interest in NRAS properties since September 2011, and believes it will continue to gain traction.

Mr Fenn noted that the biggest change has been the take up of NRAS properties in self-managed super funds (SMSFs). “We’re seeing now probably up to 25 per cent of the investments from mum and dad investors, who are utilising their SMSF to hold the property,” he said.

The market seems to have become more aware and comfortable with the product, Mr Fenn said. He points to factors including tax benefits and positive cash flow incentives as reasons why investors are considering the NRAS scheme.

“The product is maturing, and the financial institutions are designing specific financial loans [for NRAS properties],” he said.

Mr Fenn explained that it is now significantly easier to acquire investment loans to purchase NRAS properties, with investors obtaining loans between 80 per cent and 90 per cent on average.

Under the Australian government’s initiative to stimulate the supply of 50,000 new affordable rental dwellings, investors are entitled to receive annual tax incentives just under $10,000. The scheme aims to provide affordable rental accommodation at 20 per cent below market rates to low and moderate income households.

Mr Fenn explained that it is now significantly easier to acquire investment loans to purchase NRAS properties, with investors obtaining loans between 80 per cent and 90 per cent on average.

He points to factors including tax benefits and positive cash flow incentives as reasons why investors are considering the NRAS scheme.

Yet, despite the scheme gaining momentum, some investors continue to be wary about its capital growth and rental return potential.

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The National Rental Affordability Scheme (NRAS) has seen increased interest among buyers. Ethan Affordable Housing managing director, Ashley Fenn, told Smart Property Investment that his company has recorded a 100 per cent increase in interest in NRAS properties since September 2011, and believes it will continue to gain traction.

 

Mr Fenn noted that the biggest change has been the take up of NRAS properties in self-managed super funds (SMSFs). “We’re seeing now probably up to 25 per cent of the investments from mum and dad investors, who are utilising their SMSF to hold the property,” he said.

The market seems to have become more aware and comfortable with the product, Mr Fenn said. He points to factors including tax benefits and positive cash flow incentives as reasons why investors are considering the NRAS scheme.

“The product is maturing, and the financial institutions are designing specific financial loans [for NRAS properties],” he said.

Mr Fenn explained that it is now significantly easier to acquire investment loans to purchase NRAS properties, with investors obtaining loans between 80 per cent and 90 per cent on average.

Under the Australian government’s initiative to stimulate the supply of 50,000 new affordable rental dwellings, investors are entitled to receive annual tax incentives just under $10,000. The scheme aims to provide affordable rental accommodation at 20 per cent below market rates to low and moderate income households.

SMSFs drive NRAS boom
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