Yahoo Finance 3 ways you can profit from a housing market rebound
Recent housing market data appears to be hinting that house prices are close to bottoming, which has many believing that a rebound could be coming 2020.
Don’t worry if you can’t afford to buy a house to capitalise on this, because you can still potentially profit from a housing market rebound through ASX shares.
Related article: 10 Aussie suburbs that saw double-digit property price growth
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Related article: House prices are still dropping, but the bottom is in sight
Three shares that I think could benefit greatly are listed below:
REA Group Limited
REA Group has been a real surprise package in FY 2019. Despite the housing market downturn, it has defied expectations and continued to deliver strong profit growth. Looking ahead, I believe a rebound in house prices is very likely to lead to an increase in property listings for the realestate.com.au operator. This could result in the company experiencing an acceleration in its profit growth, potentially driving its share price higher over the next 12 months.
Wesfarmers Ltd
As the owner of the Bunnings, Kmart, and Target brands, I think Wesfarmers would benefit greatly from a rebound in house prices. In respect to Bunnings, I feel that improving house prices could lead to home owners undertaking renovations before putting their properties on the market. For similar reasons, the company’s Kmart and Target businesses could see increasing demand for homewares and benefit from the usual boost to consumer sentiment that house price increases often provide.
Westpac Banking Corp
If the housing market rebounds next year then Australia’s big four banks are likely to experience an increase in demand for mortgage loans at long last. This could be a big boost to their bottom lines, especially after they opted not to pass on the Reserve Bank’s cash rate cut in full. Whilst all the banks are likely to benefit, I think Westpac’s shares are one of the better options due their attractive valuation and above-average dividend yield.
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