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Dr. Mark Sinclair
Dr. Mark Sinclair, Mentor Education

Risky Property Schemes On ASIC’s Agenda

27 September 2013

ASIC has commented that it will widely publish the risks associated with borrowing by self-managed superannuation funds to invest in property, in a bid to lessen the potential for tragedies.

The watchdog has a close check on estate agents who might be breaking the law by recommending self-managed funds to investors, without being qualified to offer investment advice. They are also currently investigating a number of advertising campaigns that are designed to encourage savers to gear into property through a do-it-yourself fund.

ASIC has stated that although taking out a mortgage to buy a property in a self-managed scheme is a perfectly sensible investment for the vast majority of trustees their main concern is not for the ones who know what they are doing, but for the few that have little or no experience.

The figures from the ATO show that the amount of residential property held by do-it-yourself schemes has risen from $13 billion to $17.5 billion over the past three years, but the level of gearing is low and self-managed super schemes had $2.4 billion of outstanding loans against property and shares as of June 30, representing less than 0.5 per cent of assets in the do-it-yourself sector.

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