Capital values for most property sectors are now close to bottoming out, but with yields set for a period of stability the recovery will be modest by past standards. We expect all-property total returns to average 7.5% p.a. over 2024-28. That’s an upgrade on our previous view but that primarily reflects the addition of the residential sector into our forecasts. In that sector, a strong rental outlook will offset a low income return and boost total returns to nearly 10% p.a. over 2024-28. That’s the best performer of all sectors, with industrial expected to see returns of around 8.0% p.a. and the struggling office sector around 5.5% p.a..
We will be holding a drop-in and discussing these forecasts at 11am on Wednesday June 12th. Please register here for the event.
Our commercial property forecasts can be accessed via our new Commerical Property Dashboard, see here.
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