By Ivan Filipovic – Director Redwood Advisory SMSF Specialists
Recently there has been significant press about self managed superannuation funds (“SMSF”) causing a property bubble. This was referenced by the Reserve Bank of Australia (“RBA”) delivering a warning in late September in relation to the risk of SMSFs pushing up property prices.
Redwood Advisory’s Director Ivan Filipovic commented that “although SMSF lending has grown in recent years, it accounts for a small share of overall bank lending. Although there is concern around property spruikers, our focus at Redwood Advisory is on investor education of SMSF Trustees on the risks and benefits of investing in property through SMSF including “Limited Recourse Borrowing Agreements”.
“Through education, this will limit the influence the influence of any property spruikers out there. After all, the move from industry funds to SMSF’s is driven by ‘control’ and Trustees generally research providers and structures prior to a consultation with a SMSF Specialist.”
Redwood Advisory will continue to strengthen its administration and compliance practices to ensure investors are educated prior to setting up an SMSF and see borrowing to invest in property as an opportunity for Australians to access an alternate source of capital, rather than a threat.