SMSF investors load up on mortgage debt

Property is going up while overall holdings take a hit - and DIY funds are amping up their borrowing.

Summary: Concerns about SMSF borrowing for property purchases are being raised as Australian funds’ property holdings are growing against a backdrop of falling share prices and market volatility. In the September quarter SMSF property holdings were worth $94.7 billion, up from $82.7 billion in September 2014. SMSFs had $18bn in limited recourse borrowing arrangements (LRBAs) at September 2015, or 3.1 per cent of all SMSF holdings.

Key take out: The federal government has tasked the ATO and Council of Financial Regulators to monitor the levels at which SMSFs are leveraged. At this stage, lending for property is set to continue.

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