SMSF investors eyeing new residential real estate

by Madison Utley19 May 2020

The economic turmoil around the COVID-19 pandemic is directing self-managed super fund (SMSF) investors to new residential real estate for capital growth, according to a Queensland property developer. 

KDL Property Group has seen an increase in SMSF investor interest in its residential housing projects from the time the virus’ impact was felt across the global economy.

“We have been receiving strong inquiry from SMSFs looking for residential assets in areas with good capital growth,” said KDL managing director Kent Leicester.

The group witnessed a similar pattern of SMSFs looking to invest in new residential homes during the global financial crisis (GFC) in 2008, according to Leicester. 

“The interest we are receiving from investors highlights how they are looking to stabilise their funds by putting some of their money into new residential property,” he explained.

“We saw a similar trend post GFC with a surge of interest in securing bricks and mortar. People in SMSFs are usually homeowners themselves and they see the value in residential property over the long term.

“The attraction of new homes on freehold titles is the potential for higher cash flow compared to apartments and townhouses, as well as no body corporate levies.”

Despite the economic impact of the COVID-19 pandemic, Leicester has remained upbeat about the SEQ property market, especially as interest rates remain at record lows.

“It is still an excellent environment to enable investment in the recovery phase and property will be a safe haven with the share market experiencing so much volatility,” he said.

KDL has recently developed two high growth areas in Logan, south of Brisbane.

“KDL’s $22m Montana Logan Reserve estate and the $19m Nevada Park Ridge project offer investors the opportunity to purchase already completed new homes in vibrant communities popular with families and young couples,” Leicester said.

“KDL has built these new homes and we work with local property managers to secure tenants for the properties with rental guarantees over the next 18 months.”