New research has revealed 1 in 2 Aussies think property is the most secure and profitable long-term investment, compared with shares, gold, cash and fixed interest.
The findings come from a survey of an independent, nationally representative panel of 1006 Australians commissioned by online finance information platform Money.com.au. The full survey results, including across age and State, can be found here: money.com.au/long-term-investment-study
Thew survey also showed 41 per cent would invest in property within their superannuation if they met the criteria.
Australia's property market has experienced an incredible boom over the last few years, saw housing prices peak again after a fall in interest rates, and remained relatively unscathed during the height of the pandemic despite early predictions of up to 30 per cent decline.
Similarly, the stock market has outperformed initial expectations, following the sharp swing at the start of the pandemic.
Forty-two per cent of Aussies said property is the best avenue for long-term return on investment, followed by a third (32 per cent) who believe shares will provide the best returns. An equal nine per cent think gold and cash are the best investments, and eight per cent think fixed interest such as government or corporate bonds is the best avenue for investing money long term.
The extent to which Aussies feel property will continue to perform strongly is in the high proportion: (41 per cent) that said they would consider investing in direct property - such as a residential apartment - in a self-managed super fund (SMSF).
An SMSF allows members to invest in direct property, choose the property they invest in, and control their own fund as the trustee. Forty-one (41) per cent of respondents said these factors make it attractive for them, with 33 per cent saying they would consider establishing one in the future. Eight per cent of respondents said they already have such a fund.
Money.com.au also asked respondents why they have not already set up such an SMSF. Among those who do not already have one, 28 per cent said they lack funds in their existing super. A further 19 per cent of respondents admitted they lack good advice to get them started, 18 per cent said they are not focused on their retirement yet, and 18 per cent said they did not have the time or energy to set it up.
When asked what types of property respondents would be most interested in investing in their SMSF, the majority of respondents (66 per cent) said residential houses, 39 per cent said residential apartments, and 34 per cent said commercial property.
Over the long term, direct property investments have provided stable income and strong capital growth, making it an attractive core investment avenue for wealth creation. In Australia, direct property accounts for 15 per cent of SMSF asset allocations.
Helen Baker, licensed financial advisor and spokesperson at Money.com.au, says: "The survey findings indicate that Australians are still confident in investing in our property market, despite the swaying effects of the pandemic. Our property market has shown resilience over the past six months, with house prices not falling nearly as low as experts had predicted at the start of the shutdowns.
"This high level of confidence is also echoed in the fact that many would invest in property within a self-managed super fund to fund their retirement. However, not many people know how to establish a self-managed fund.
"Starting your own fund is quite complex, with strict guidelines to follow, so I always encourage people to seek qualified advice from a professional. I also advise Australians to do their own research, particularly when investing in real estate. While setting up a self-managed super fund can be complicated and time-consuming, it often reaps substantial benefits in the long term for those whom it may be appropriate to."
Money.com.au reveals some key rules on investing in property within a SMSF
- The property must be used solely for the purpose of funding the individual's retirement - referred to as meeting the sole purpose test.
- The fund member or their related parties can not live in the property
- The fund member or their related parties cannot rent the property
- The property cannot be acquired from members' related parties