Despite downturn, property still popular for Gold Coast super investors
About 15% of first-time property investors on the Gold Coast plan to use their self-managed super funds to buy their first investment properties, according to a recent survey.
Nearly 6% intend to use their SMSFs to purchase the property in its entirety, and about 9% expect to use their super to help supplement other sources of funding, according to Mortgage Choice’s First Time Property Investor survey.
Gold Coast SMSF property investment intentions are head-and-shoulders above any other region in Australia, with just 6% of Sydney investors and 5% of Melbourne investors planning to tap into their super funds when making their first acquisition.
A higher proportion of Gold Coast respondents to the survey were baby boomers (38%), compared with 27% nationally. Generation X was also represented more highly on the Gold Coast (53% of survey respondents, vs. 45% nationally).
One baby boomer respondent living on the Gold Coast says: “I think there will be another super drop in the next 12 to 18 months, so feel property is safer”.
“For many people, the older they become the closer ensuring they have enough super for a comfortable retirement moves to the forefront of their financial concerns,” Mortgage Choice spokeswoman Kristy Sheppard says.
According to the survey, Queensland is the preferred destination for 22% of Australian property investors, followed by Victoria at 21%. NSW ranked a joint third with South Australia and WA at 18%.
Leanne Pilkington, general manager of Laing & Simmons, says high prices in Sydney are driving investors to look to markets like Queensland and Victoria.
“Sydney is so expensive. It’s just not affordable, compared, in particurlar, to Queensland,” she recently told the AFR.
“Investors need to look at other options because they can’t invest in Sydney,” she adds.
According to SMSF administrator Multiport, DIY funds allocation to direct property rose to 14% in March 2011 from 12% at the end of March last year, with residential property gaining traction at the expense of commercial properties such as small offices and industrial warehouses.
A similar study carried out in 2009 did not break down the responses into regions, but found that around 4.5% of first-time investors planned to use their SMSF to either to buy an investment property outright or to help fund its purchase.
In 2011, the overall figure is down slightly to 4%.
The most popular properties sought by first time investors are small houses with between one and three bedrooms, followed by larger houses and one- and two-bedroom units.
The survey accumulated responses from more than 1,000 people who plan to buy an investment property by July 2013.Click to download 16 Questions Self-Managed Super Fund Trustees Should Ask Before Investing in Property.
Now, all signs point south for this market. A year ago vacancies were near zero but today they’re approaching 5%. Price growth has stopped and, according to Australian Property Monitors’ price graph, has started to dip below the red line.
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