subscribe to our newsletter
SMSF role in property bubble ‘small’

SMSF role in property bubble ‘small’

Elyse Perrau
22 April 2014 — 1 minute read

SMSF investment in residential property is only playing a “small” part in the formation of a property bubble, according to a chief economist at AMP Capital.

AMP head of investment strategy and chief economist Dr Shane Oliver said when house prices increase and affordability deteriorates, there is a tendency to look for “scapegoats”.

“A decade ago it was high immigration and negative gearing, now it looks to be foreign buyers, SMSFs and as always, negative gearing,” he said.

“Foreign and SMSF buying is no doubt playing a role in some areas but looks to be relatively small overall,” he added.


Dr Oliver said the homebuyer market is a long way from the bubble conditions of 10 years ago, but the risk of a property bubble is rising.

“Further gains in house prices are likely this year, but gains are likely to slow as the Reserve Bank of Australia steps up its warnings about excessively rising house prices,” he said.

Dr Oliver believes the fundamental problem causing high house prices is a lack of supply.

“Vacancy rates remain low and there has been a cumulative construction shortfall since 2001 of more than 200,000 dwellings,” he said.

“The reality is that until we make it easier for builders and developers to bring dwellings to market – and hopefully decentralise our population in the longer term – the issue of poor affordability will remain,” he added.

SMSF role in property bubble ‘small’
smsfadviser logo
join the discussion

Are you currently covered by an AFSL to provide limited or full financial advice?


Get the latest news and opinions delivered to your inbox each morning

In this month's issue:

  • Time wrap
  • The tech bull run
  • From hobby to passion
  • Golden Years
  • An untimely reminder
  • Why change is so difficult
  • Key Strategies for equalising super