SMSFs are no threat to homebuyers, according to analysis in the latest Class SMSF Benchmark Report.
The Class SMSF Benchmark Report for the December 2016 quarter found that SMSFs own less than 1% of the residential property in Australia, compared to the 22% owned by non-SMSF investors and 68% belonging to owner-occupiers. 5% is public housing and 4% is classified as ‘other’.
This corresponds to SMSFs holding about $64 billion of residential Australian property, while the whole market is estimated at $6.7 trillion.
Class CEO Kevin Bungard said this research showed SMSFs were 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,” said Mr Bungard.
The Class SMSF Benchmark Report found that most SMSFs have no direct property exposure. Almost 73% of SMSFs, based on the number of funds instead of value, have no holdings of either residential or commercial property.
However where SMSFs do hold direct property it makes up roughly half of the assets of the fund. For SMSFs holding only residential property it makes up 47.0% of the portfolio. For SMSFs with non-residential property it makes up 51.3% of the portfolio.
“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,” said Mr Bungard.
“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.”