Warning signs in the A-REITs sector?

Former associate editor and columnist with the Australian Financial Review
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Investors chasing growth have done well from A-REITs in the last five years. Listed real estate trusts have beaten the wider stock market by about 50% and there are still plenty of property bulls, emboldened by continued buoyant signs in some sectors.

But realists, remembering the cycles in property, aren’t convinced. The property market is cyclical and prone to wide swings, especially in residential apartments, and share prices are already heading to lofty levels.

Demand for property is being driven by speculators (who think they are investors), convinced that very low interest rates can continue for a long time and that overseas money (especially from China) is limitless.

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