With further interest rate rises expected, experts say property prices will continue to soften, setting up another challenging year for self-managed superannuation funds.
, with the Reserve Bank warning valuations are likely to decline this year due to higher rates and weakness in tenant demand.
Dan Hewitt, the director of financial planning firm Financial Framework, said he expected SMSFs to generate lower returns this year due to falling property prices. “Liquidity is an issue too. If you are moving towards your 50s and early 60s, and you need to access some of that capital in retirement, you’ve got to sell the property.”
AIST said SMSFs accessing credit were a risk to the financial system, citing David Murray’s financial system inquiry in 2015, which recommendedThe Murray report said borrowing by SMSFs made the financial system more vulnerable to a downturn in property prices, but the Turnbull government rejected the recommendation, arguing there was insufficient evidence to support an immediate ban on borrowing.
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