Cross-posted from Martin North’s DFA blog.
Continuing our series on the latest DFA survey results, today we look at the investment sector. We start by looking at the barriers which Investors believe may influence their investment decisions. Whilst the impact of budgets changes are off the agenda now, there is a growing concern about upcoming regulatory changes and how they may impact the investment market. In contrast the RBA warnings appear to have lost their immediate focus. Investors are less concerned about potential interest rate rises now and a greater proportion have already bought. High prices are having an impact, but it appears obtaining funding is not an issue for most. We found that, unlike first time buyers, investors were easily able to find appropriate properties to purchase, and gain finance.
Looking at solo investors in particular, they are driven by tax efficiency, and expectation of appreciating property values. They see net returns from property a better bet than deposits.
The picture for portfolio investors is somewhat similar. They are move motivated by the hope of appreciating values than solo investors and the tax advantages of leveraged property investment.
Those investors considering investing in property via a SMSF wrapper, are clearly driven by tax strategies and the expectation of rising property values.
We see these SMSF investors are getting their advice from a number of sources, mortgage brokers, and internet sites have the greatest impact, and we noted a rise in advice from real estate agents as an influence. (In this survey, investors could score multiple advice sources).
Finally, we asked about the property distribution within a SMSF, and the greatest proportion is between 20 and 40 per cent of the portfolio.
