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Self Managed Superannuation Funds… The market segment that will hopefully not be the precursor for a real estate change.

SMSF Residential Property Valuations

For those baby boomers nearing the end of their working days or those parties that are planning for that retirement period in future years…be careful. The acquisition that you entered into already may be one of the worst financial decisions you have made or perhaps you may have created an untenable retirement period already for the future years ahead.

Let’s face it, the real estate market specific to Metropolitan Melbourne has witnessed a sustainable increase in levels of value unparalleled for many years. More so since the Global Financial Crisis (GFC). The dollar quantum increases in value in fact, is outstanding and no one in their right mind could argue that those parties that have already prudently acquired real estate over the years will benefit when retirement arrives.

Why The Apartment Market Is Not As Shaky As It Is Made Out To Be

Difficulty in obtaining funding for a project to get off the ground is a difficult task in any property cycle. The base rules of most multi unit apartment developments have been fundamentally the same over the last five year period. Developers need to own the land outright, pre sales are a requirement, the construction/builder is to be known to the marketplace and the entity needs to be able to show debt coverage of a percentage plus basis over the total development period. The simple truth is for a project to get “off the ground”, an intending funder has undertaken their due diligence process.

Residential Investors Favour Units, Low Value Segments

Following extensive research, CoreLogic estimated there were 2.6 million investor-owned dwellings across Australia worth approximately $1.37 trillion in total. Meanwhile, current taxation statistics showed there were 2.03 million individual investors, which each own an average of 1.28 investment properties.

In contrast, data from the Australian Securities Exchange (ASX) identified that approximately 6.48 million people, or 36% of the adult Australian population, own shares in property. 
Investor-owned dwellings were found to comprise 26.9% of all housing stock by number, or 23.8% based on the value of all housing stock.