Even before the Reserve Bank of Australia increased the official cash rate six times this year to 2.6%, many industries in the economy were affected by the fear that rates would continue to be hiked. The real estate market is one sector that might suffer the consequences to a greater extent than others.
Mortgage payments go up whenever interest rates go up; as a result, there is less demand for housing, which in turn leads to a decrease in property prices.
Home prices are forecast to fall by 20% in Sydney, formerly considered one of the world’s most competitive real estate markets.
As a result, the value of ASX REIT stocks plummeted in 2022. Investors in real estate investment trusts (REITs) are feeling optimistic as the market is currently recovering from the previous fall.
Here we have two ASX REIT stocks that look good and promising on the charts.
- HomeCo Daily Needs REIT (ASX: HDN)
- Goodman Group (ASX: GMG)
HomeCo Daily Needs REIT (ASX: HDN)
HomeCo Daily Needs REIT (ASX: HDN) is an ASX REIT stock engaged in real estate properties’ ownership, development, and management. HomeCo Daily Needs was created with household brands and extreme ease of use in mind. Each shopping centre is anchored by well-known brands, backed by some of Australia’s most successful property development and retail firms.
This REIT firm invests primarily in convenience-based assets that are metro-located, stable, big format retail, health and services, and neighbourhood retail.
It has been projected by Morgan that shareholders would get dividends totalling 8.3 cents in the fiscal year 2023 and 8.7 cents in the fiscal year 2024. The dividend yields for HomeCo Daily Needs would be 6.4% and 6.7%, respectively, if the HomeCo Daily Needs REIT ASX stock remained to trade at its current price of $1.28 per share.
HomeCo Daily Needs REIT stock is expected to reach a price of $1.56, according to Morgans’s price forecast.
Goodman Group (ASX: GMG)
Goodman Group (ASX: GMG) is a prominent ASX REIT stock. Let’s compare the Goodman Group share price performance to that of other real estate investments. We can say with confidence that it will outperform the market overall. It is also one of the most important shares on the ASX 200 REIT chart, with a market capitalization of $31.14 billion and placing it among the top spots.
To be specific, Goodman is a global, vertically integrated real estate firm that caters to the manufacturing industry. Warehouses, factories, distribution centres, industrial parks, and office complexes are some of the properties included in its portfolio of assets.
The firm focuses its operations on investment, fund management, service provision, and business development. They operate 14 sites around the Americas, Asia, Europe, and the United Kingdom.
Greg Goodman, the current CEO and founder of the firm, states that the organization is managing real estate assets worth $73 billion and has projects planned that would cost $13.6 billion.
The organization is responsible for administering a total of 410 properties. According to the company’s most recent annual report, the business had an operating profit of $1.5 billion in 2022.
Goldman has assigned a “buy” rating to this ASX 200 REIT stock and Goodman Group stock is set a price target of $25.40 for the coming year. If you were curious, it rounds out to a potential gain of 49.85% in one year.