Class SMSF Benchmark Report Finds SMSFs No Threat to Homebuyers
Thursday 16 February 2017 – The latest Class SMSF Benchmark Report has found that SMSFs are no threat to homebuyers worried about rising prices, given their very small share of residential properties.
The SMSF Benchmark Report for the December 2016 quarter, based on an analysis of over 125,000 funds, found that SMSFs owned less than 1% of residential properties in Australia, compared to the 22% owned by non-SMSF investors and the 68% held by owner occupiers.
That SMSF market share of residential property represents about $64 billion of the $6.7 trillion estimated value of the total residential market.
Class CEO Kevin Bungard said this new data showed that SMSFs were clearly not a significant driver of residential property prices. “SMSF property purchases are just too small a part of the market to be having a big impact,” Mr Bungard said.
Most SMSFs have no direct property exposure
SMSFs as a group do not appear to be highly exposed to property investments. Almost 73% of SMSFs (by number) do not hold any direct property at all, either residential or commercial.
And their indirect exposure to property through listed and unlisted trusts, at an estimated 7%, is not dissimilar to the exposure of APRA funds at 9%.
When SMSFs do hold direct property, it makes up about half the assets
Those SMSFs that do hold direct property have a very significant exposure to it – about half the fund on average is made up of direct property, with proportionally less exposure to cash and shares than funds which don’t have direct property.
Mr Bungard said: “These figures are worthy of further discussion and analysis but we should not simply conclude that the members of these SMSFs with direct property are overexposed to this asset class. Many of the members of these funds would have investments outside of their SMSF as well, so you would need to look at the totality of their wealth to be able to draw conclusions about the risks they are taking.”
The Class SMSF Benchmark Report can be downloaded here.
The Class SMSF Benchmark Report is a statistical analysis of 125,000 Self-Managed Super Funds administered on Class Super, representing more than 21% of the estimated number of SMSFs in Australia today.
The quarterly Report is compiled using a selection of de-identified data extracted from across the Class Super customer base.