The recovery in listed property still has momentum, Metope says
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Should you consider investing in property to protect against inflation?
We urge caution when making property investments at this time, despite the low rate of interest and marketing from property developers.
12 May 2021 06:18
Image: Getty Images
Last month the governor of the Reserve Bank said that he expected that interest rates would not increase during 2021 and that he expected inflation to stay under control.
Have you noticed an uptick of unsolicited property-investment related offers coming to your inbox? Or the increase in the number of property adverts in the Sunday papers? Are property marketers âputting lipstick on pigsâ or are there bargains to be had?
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Sector up more than 20% this year, after pandemic plunge of 35% in 2020. 00:01
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Sandton â SAâs financial hub and a major property node, seen from The Leonardo, Africa s tallest mixed-use building. Image: Moneyweb
South Africaâs real estate investment trust (Reit) or listed property sector surged in April, overtaking equities as the top-performing asset class on the JSE.
In fact, the recovery of the country’s listed property sector is topping the table globally at the moment, up just over 20% year to date (YTD).
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Property: Where to be positioned in 2021?
Property has been the worst performing asset class on the JSE for over three years now, but any long-term investor knows that real estate is cyclical. The property index has retreated around 40% from its highs in early 2018 and there are many Real-estate investment trusts (Reits) on the local bourse that are trading well-below net asset value and offering attractive dividend yields. This is as a result of many Reits in South Africa being over-leveraged and question marks surrounding property valuations. This is especially evident in property asset classes such as office and retail, both of which have been decimated as a result of Covid-19 and the ‘work from home’ trend that has emerged in 2020.
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