Survey finds commercial property and external investment set to rise as new LRBA restrictions take effect
Self-managed superannuation fund (SMSF) trustees remain committed to property investment despite new restrictions on limited recourse borrowing arrangements for residential assets taking effect this week, according to new research.
A survey of 1,000 Australians by Money.com.au — 400 of whom hold or plan to establish an SMSF — found 26% intend to invest in commercial property through their fund using a limited recourse borrowing arrangement (LRBA). A further 12% plan to purchase residential property within their SMSF outright, without borrowing.
The data also showed 27% of SMSF members plan to acquire residential property outside the superannuation environment entirely.
"The borrowing ban changes how investors can access residential property through an SMSF, but it doesn't change the underlying appeal of the asset class," said Nick Burgess (pictured right), property expert at Money.com.au.
According to Burgess, commercial property is expected to attract greater interest given it is not subject to the amended LRBA rules.
"SMSF investors are more than twice as likely to buy residential property outside their super or invest in commercial property than purchase residential property outright within their SMSF using existing funds," he said. "That reflects the reality that relatively few investors have enough cash in their SMSF to buy property without borrowing."
The survey also found 82% of Australians without an existing SMSF said they no longer see value in establishing one if residential borrowing is prohibited.
Shares and exchange-traded funds remain the most popular investment category, with 46% of SMSF members planning to increase their allocation. Term deposits were the next most cited, with 23% intending to lift exposure.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
