SMSF investment in residential property has been a growing concern. Although a less volatile form of investment than market shares, it has been called out as there is a high demand for property in recent years, and SMSFs have been used for this investment type.
The SPAA (SMSF Professionals’ Association of Australia) called these claims as overstated; citing SMSF asset shares in residential property is just a small percentage of the entire sector. As of June this year, residential property shares are at $17 billion, dwarfed by the commercial sector at $58 billion out of a total of $495 billion SMSF asset shares. Commercial property has also been on the rise in this sector as more self employed people consider purchasing their business premise under their SMSFs as this assures a steady income flow – depending on the business performance, and taxation is lesser when the business is setup as an asset. Residential property makes up only 3.4% of this sector.
You can read more about this on the SMSF Essentials website.