There has been much discussion recently regarding the prospects for Australian residential property. From high profile media coverage predicting a ‘mortgage meltdown’ to debate in parliament suggesting changes to negative gearing will trigger an Australian property price collapse. Indeed, type ‘Australian Property Bubble’ into Google and the search will return no less than 500,000 results. So, is it a bubble or does this simply reflect the recency bias of the GFC? We prefer not to think about fair value but rather prospective returns. The Japanese Real Estate Investment Trust (J-REIT) for example may be fair value, but their prospective returns are low. In this respect, we feel the return prospects for Australian property to be quite low on a medium-term to long-term basis. Read our full analysis in our Investment Perspectives: (VIEW LINK)
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