Superannuation vs. property returns: What’s the winner?

Brisbane homeowners make more money for their properties than their superannuation funds.

Brisbane homeowners are sitting on goldmines, making more money from their properties than their superannuation funds, according to new research.

Exclusive data provided by Finder revealed the country’s super fund performances compared to property growth around the Sunshine State.

It comes as Finder research showed 23 per cent of Aussies – equivalent to 4.6 million people – admit they don’t have enough money in their super fund or other investments to get by in retirement.

23 per cent of Aussies don’t have enough money in their super funds or other investments to get by in retirement.

97 Warriewood Street, Chandler sold for $3.4m.

The average 10-year performance across all super funds is 5.7 per cent a year, according to Finder analysis of Super Ratings data, which measures 113 publicly released super fund products.

That’s 0.2 per cent less than Brisbane’s 5.9 per cent 10 year annual compound property growth rate, the third biggest return in the country under Hobart (6.9 per cent) and Adelaide (6.7 per cent).

It shows homeowners in 166 suburbs across Brisbane recorded bigger annual returns on their homes than the country’s average super fund return, although the data does not take into account the ongoing costs of home ownership.

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The average 10-year performance across all super funds is 5.7 per cent a year.

758 London Road, Chandler, is on the market at offers over $3.15m.

When comparing property returns, house values in Chandler, in the city’s east, had the highest 10 year annual compound growth rate in median sale price at 11.8 per cent, following by Roberston (10.9 per cent) and Anstead (10.6 per cent).

Around the state, Beechmere, in Moreton Bay, recorded more than double at 19.2 per cent.

On the Sunshine Coast, Shelly Beach reined supreme with 13.4 per cent, while on the Gold Coast Surfers Paradise was king with 12.9 per cent.

The highest super fund return in Australia hit 8.79% per cent.

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Brisbane-based Mortgage Choice broker Caroline Jean-Baptiste said choosing what to invest into came down to strategy.

“When it comes down to what’s better, it totally depends on strategy,” Ms Jean-Baptiste said.

“Most people have a reasonably balanced view of property and super and tend to diversify over favouring one or the other.

“We’re seeing self employed people buying commercial property in their super and that’s generally on the back of advice from other professionals, their accountant or financial planner.

“We’re also seeing a lot of people use self managed super funds for commercial properties and investment properties.”

Finder’s Richard Whitten

The recent Labor government tax changes, which apply an additional 15 per cent tax on earnings for super balances exceeding $3 million, are designed to affect an estimated 80,000 Australians (0.5% of super account holders).

“The $3 million cap is not indexed to inflation, meaning that over time, as balances naturally grow, more individuals may find themselves impacted,” said Richard Whitten, money expert at Finder.

“While it’s unlikely to become ‘common’ for the average Australian to reach this threshold quickly, particularly younger people with decades of super growth ahead might eventually be affected.

“But it’s a nice problem to have.”

Three piggy banks under magnifying glass on question marks background. Saving money concept; superannuation saving generic

According to the ATO, as of the 2021 financial year, the average super fund balance for women between the ages of 65-69 was $403,038, and $453,075 for men.

These figures indicate many Aussies are set to retire with substantially less than ASFA’s comfortable retirement standard of $595,000.

“Retirement often arrives sooner than you think, and the more attention you give your superannuation now, the better off you’ll be,” Mr Whitten said.

– With Aidan Devine

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