Is there still value in property stocks?

RELATED QUOTES

SymbolPriceChange
CFX.AX2.02+0.0200
CQR.AX3.82+0.060
CPA.AX1.250.00
WDC.AX10.755-0.015
WRT.AX3.19+0.010

Last month I said that there may be better places for your money than obvious property stocks such as Westfield Group (WDC.AX) and Westfield Retail Trust (WRT.AX).

Both appear overvalued with slowing growth and I think money could be better spent elsewhere, but investors must find something appealing in these stocks. Westfield Group, Westfield Property Trust and Stockland (SGP.AX) have all increased over 30% this past 12 months.

On Monday, The Australian Financial Review said that property stocks were being pushed up by high yielding dividends. So in a seemingly flat Australian property market, is there still room for growth?

Goodman Group (GMG.AX) was one alternative I said may outperform its bigger rivals. Since last month alone it’s increased 13.8% but may have already ran its race, increasing over 40% for the year.

Commonwealth Property Office Fund (CPA.AX), Charter Hall Retail REIT (CQR.AX) and CFS Retail Property Trust Group (CFX.AX) have all had positive returns for shareholders this past year. Perhaps the retail property market is doing very well or perhaps the rise in share prices have something to do with their dividend yields, all paying 6% or more.

Foolish takeaway

Property stocks are favourites for many risk-averse investors since they provide exposure to a tangible product, have big yields and huge market capital. They’re not in a bubble yet but if interest rates go any lower we could see high yielding stocks like these go even higher.

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More reading

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool contributor Owen Raszkiewicz does not own shares in any of the mentioned companies.

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