Property market voted most secure, profitable investment amid pandemic

New research has found Australians are backing the property market above all else despite the ongoing financial impacts of Covid-19. At the peak of the pandemic, experts were predicting a drop of around 30 per cent in housing prices however, over the past six months, it has proved resilient showing a drop of just 1.1 per cent in the last quarter according to the latest data from CoreLogic.

Due to this, one in two Australians have said they believe property is the most secure and most profitable long-term investment option out there compared to shares, gold, cash and fixed interest, according to an independent survey by financial management company Money.com.au.

Shares came next in line for Australian investors with a third saying they would provide the best returns followed by an equal 9 per cent who thought gold and cash were their top choices. Meanwhile, investors had the least amount of faith in fixed interest offerings, such as government or corporate bonds, to provide them with a decent return.

But when it came to property, a large chunk of the respondents expected the boom in the market to continue throughout the remainder of the pandemic with 41 per cent saying they would consider investing in direct property via their retirement income through a self-managed super fund (SMSF). Two thirds said they would choose to purchase a residential house, while 39 per cent said residential apartments and 34 per cent would choose commercial property.

Currently in Australia, direct property accounts for 15 per cent of all SMSF asset allocations, according to ATO data. Helen Baker from Money.com.au said that the survey findings indicate Australians’ continued interest in property investment to fuel retirement income streams despite everything that’s happened with 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,” she said. “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.”

For those looking to invest in property within a SMSF, Money.com.au highlighted some key rules to be aware of. Firstly, the property must be used solely for the purpose of funding a retirement or in other words it has to meet the ATO’s sole purpose test.

Additionally, the fund member and related parties are not able to live in or rent the property to ensure it’s exclusively for genuine investment purposes. The property is also not allowed to be acquired from any members related to the fund member.

Those looking to take advantage of the positive outlook on the property market and move investments into the sector can find out more about downsizing and increasing retirement income through the housing market from Starts at 60’s webinar with property and financial experts Noel Whittaker, Rachel Lane and Kate Melrose which can be found here.

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.