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Best long-term investment

Property has always been entwined in the national identity. So much so that we consider property ownership ‘the great Australian dream’.

And despite the stock market bouncing back from the first outbreak of the coronavirus, it is also going to take some serious persuading to knock it off the perch as Australia’s most popular investment option.

New research has revealed one in two Australians think that property is the most secure and profitable long-term investment, compared with shares, gold, cash and fixed interest.

With the Reserve Bank of Australia opting to leave the cash rate at an historically low 0.25 per cent, there are no surprises that fixed interest and cash hold little attraction for investors.

But the popularity of property as an investment at this time is so strong that a significant proportion of Australians would choose to invest in property with their superannuation, if they met the criteria required.

According to the results of the money.com.au survey of 1006 Australians, 62 per cent of those in their 50s and 59 per cent of those over 60 would be more interested in investing in residential houses in their self-managed super fund (SMSF).

An SMSF allows members to invest in direct property, choose the property they invest in, and control their own fund as the trustee.

Forty-one per cent of respondents said these factors make an SMSF attractive for them, with 33 per cent saying they would consider establishing one in the future. Eight per cent of respondents said they already have such a fund.

Money.com.au also asked respondents why they had not already set up such an SMSF.

Among those who did not already have one, 28 per cent said they lacked funds in their existing super. A further 19 per cent of respondents admitted they lacked good advice to get them started, 18 per cent said they are not focused on their retirement yet, and 18 per cent said they did not have the time or energy to set it up.

While 42 per cent of Australians said that property was the best avenue for long-term return on investment, shares were not too far behind, with 32 per cent believing the share market will provide the best returns.

An equal 9 per cent think gold and cash are the best investments, and 8 per cent think fixed interest such as government or corporate bonds is the best avenue for investing money long term.

Licensed financial adviser Helen Baker said the results of the survey showed Australia’s love affair with property was unlikely to take too much of a hit during the pandemic.

“The survey findings indicate that Australians are still confident in investing in our property market, despite the swaying effects of the pandemic,” Ms Baker said.

“Our property market has shown resilience over the past six months, with house prices not falling nearly as low as experts had predicted at the start of the shutdowns.

“This high level of confidence is also echoed in the fact that many would invest in property within a self-managed super fund to fund their retirement. However, not many people know how to establish a self-managed fund.

“Starting your own fund is quite complex, with strict guidelines to follow, so I always encourage people to seek qualified advice from a professional. I also advise Australians to do their own research, particularly when investing in real estate.

“While setting up a self-managed super fund can be complicated and time-consuming, it often reaps substantial benefits in the long term for those for whom it may be appropriate.”

Do you have an SMSF? Has it proven to be worthwhile as an investment tool? What do you consider the most secure and profitable long-term investment?

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Ben Hocking
Ben Hocking
Ben Hocking is a skilled writer and editor with interests and expertise in politics, government, Centrelink, finance, health, retirement income, superannuation, Wordle and sports.
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