SMSF borrowing triples

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From the AFR:

The number of self-managed superannuation funds with borrowings has tripled over the past four years and average loan size has doubled to $357,000.

Funds with borrowings also invested a larger proportion of their assets in non-residential and residential real property than funds without debt, a new analysis by the Tax Office shows.

Commercial and residential property holdings now comprise more than 15 per cent of total assets held by the $1.6 trillion self-managed super sector, the third largest allocation after cash and listed shares.

…The ATO report says 27,000 new self-managed super funds are set up every year, and contributions to the sector have averaged $26.3 billion a year – exceeding employer contributions by approximately two to one.

…The report says the number of self managed super funds (SMSF) increased by 27 per cent to 509,000 over the five years to 2011-12 and held total assets of $506 billion. In terms of actual members, there is now 964,000 members in the SMSF sector, almost 8 per cent of roughly 11.6 million members in Australian super funds.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.