Success in property investment driven by income

Investment properties have been flavour of the decade for many investors, with house prices rising rapidly in cities like Sydney and Melbourne. But as this bull market flattens, it’s time to look at the number of alternative (and ‘tenant free’) ways to invest in property. In 2016, listed property stocks outperformed the broader Australian share market by 5%, posting 13.2% gains. This is an established medium-term trend; on a 5-year basis, property shares returned a full 10% above the ASX 300, a staggering total of 19.5%. Listed property is producing solid, reliable earnings compared to other defensive sectors of the share market such as Industrials, where earnings continue to disappoint. While the valuation of the ASX 200 REITS Index is at premium levels, they are cheap relative to bonds and we anticipate the sector will post earnings growth of 2.5-3% in 2017. See our property outlook moving in 2017 here: (VIEW LINK)