From Banking Day:
The self-managed superannuation loan market is worth A$6 billion to $7 billion, with about 30,000 funds currently borrowing to buy property, according to Westpac.
The head of the SMSF trustee division at Westpac, Sinclair Taylor, said Westpac and St George had a combined SMSF loan book of around $2 billion, giving it a big market share.
The group’s average loan size is around $300,000 and the maximum loan-to-valuation ratio is 80 per cent.
Speaking at an SMSF Professionals’ Association of Australia conference in Sydney yesterday, Taylor said he expected demand to increase.
Taylor said: “As cash rates come off and equities remain volatile, a lot of trustees are looking for the security of property. That is what they tell us when they come in to talk about a loan.
“We are also seeing more brokers selling the product. There is very strong growth in applications from mortgage brokers.”
That’s under half a percent of total mortgage debt. Over the three years period since the rule changes allowed leverage in SMSFs, we’ve added about $190 billion to aggregate mortgage debt so SMSF represents 3.5% of new lending over that period.