Investing For Income In A World Without Any
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    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,587,785 (-9.64%)       Melbourne $968,477 (-1.28%)       Brisbane $894,769 (-1.51%)       Adelaide $810,780 (-6.94%)       Perth $764,276 (-4.92%)       Hobart $750,134 (+1.16%)       Darwin $645,801 (-3.38%)       Canberra $1,017,220 (+3.56%)       National $1,010,264 (-5.75%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $725,381 (-1.27%)       Melbourne $488,555 (-0.24%)       Brisbane $499,581 (-5.39%)       Adelaide $411,364 (-4.41%)       Perth $414,273 (-2.57%)       Hobart $498,192 (-6.11%)       Darwin $351,130 (-4.84%)       Canberra $480,942 (-4.46%)       National $506,040 (-3.24%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 10,047 (+6,578)       Melbourne 14,543 (+5,785)       Brisbane 8,228 (+1,243)       Adelaide 2,741 (+600)       Perth 6,788 (+1,322)       Hobart 1,219 (+48)       Darwin 269 (+17)       Canberra 1,013 (+155)       National 44,848 (+15,748)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 8,226 (+4,905)       Melbourne 7,846 (+2,295)       Brisbane 1,759 (+304)       Adelaide 499 (+101)       Perth 1,899 (+331)       Hobart 186 (-9)       Darwin 388 (+26)       Canberra 854 (+60)       National 21,657 (+8,013)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $780 ($0)       Melbourne $590 ($0)       Brisbane $620 ($0)       Adelaide $600 ($0)       Perth $650 ($0)       Hobart $550 (-$10)       Darwin $680 ($0)       Canberra $690 ($0)       National $652 (-$1)                UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $725 (-$5)       Melbourne $580 ($0)       Brisbane $620 (-$10)       Adelaide $450 (-$20)       Perth $600 (+$15)       Hobart $470 (-$10)       Darwin $570 ($0)       Canberra $570 ($0)       National $584 (-$3)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,614 (+7)       Melbourne 5,631 (-24)       Brisbane 4,055 (-125)       Adelaide 1,248 (+4)       Perth 1,830 (+7)       Hobart 380 (+12)       Darwin 153 (-19)       Canberra 664 (-12)       National 19,575 (-150)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 7,725 (-368)       Melbourne 5,038 (-276)       Brisbane 2,044 (-65)       Adelaide 394 (+11)       Perth 594 (-34)       Hobart 139 (+1)       Darwin 285 (-5)       Canberra 590 (-16)       National 16,809 (-752)                HOUSE ANNUAL GROSS YIELDS AND TREND       Sydney 2.55% (↑)      Melbourne 3.17% (↑)      Brisbane 3.60% (↑)      Adelaide 3.85% (↑)      Perth 4.42% (↑)        Hobart 3.81% (↓)     Darwin 5.48% (↑)        Canberra 3.53% (↓)     National 3.36% (↑)             UNIT ANNUAL GROSS YIELDS AND TREND       Sydney 5.20% (↑)      Melbourne 6.17% (↑)      Brisbane 6.45% (↑)      Adelaide 5.69% (↑)      Perth 7.53% (↑)      Hobart 4.91% (↑)      Darwin 8.44% (↑)      Canberra 6.16% (↑)      National 6.01% (↑)             HOUSE RENTAL VACANCY RATES AND TREND       Sydney 0.7% (↑)      Melbourne 0.8% (↑)      Brisbane 0.4% (↑)      Adelaide 0.4% (↑)      Perth 1.2% (↑)      Hobart 0.6% (↑)      Darwin 1.1% (↑)      Canberra 0.7% (↑)      National 0.7% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 0.9% (↑)      Melbourne 1.4% (↑)      Brisbane 0.7% (↑)      Adelaide 0.3% (↑)      Perth 0.4% (↑)      Hobart 1.5% (↑)      Darwin 0.8% (↑)      Canberra 1.3% (↑)        National 0.9% (↓)            AVERAGE DAYS TO SELL HOUSES AND TREND         Sydney 36.6 (↓)       Melbourne 40.8 (↓)       Brisbane 36.8 (↓)       Adelaide 31.2 (↓)       Perth 41.1 (↓)       Hobart 41.6 (↓)       Darwin 49.2 (↓)       Canberra 39.9 (↓)       National 39.7 (↓)            AVERAGE DAYS TO SELL UNITS AND TREND         Sydney 36.2 (↓)       Melbourne 39.2 (↓)       Brisbane 33.8 (↓)       Adelaide 30.0 (↓)     Perth 43.3 (↑)      Hobart 43.8 (↑)        Darwin 33.7 (↓)       Canberra 45.3 (↓)       National 38.2 (↓)           
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Investing For Income In A World Without Any

Billions of dollars have poured into real-estate investment trusts this year.

By Jason Zweig
Mon, Sep 20, 2021 10:17amGrey Clock 3 min

What’s often regarded as a substitute for bonds and is up nearly 30% so far this year?

Real-estate funds, that’s what.

Before you join the hordes of investors who have poured billions into them this year, you should realize that you won’t be getting in on the ground floor—and the elevator is already crowded.

Real-estate investment trusts own, operate or finance income-producing commercial or residential properties. More than 100 mutual funds, closed-end funds and exchange-traded funds invest primarily in REITs and similar assets. Together they manage more than US$224 billion, according to Morningstar.

With interest rates still in the cellar and fears of inflation heating up, investors have flocked to these funds, whose income over time has tended to exceed rises in the cost of living.

Another reason for real-estate funds’ sudden popularity? Returns have gone through the roof thanks to price appreciation, even though dividend yields have fallen.

As of Sept. 15, nearly two dozen REITs had total returns of greater than 100% over the past 12 months, according to REIT.com.

Leading ETFs, including iShares U.S. Real Estate and Vanguard Real Estate, are up 27% to 29% so far this year, including reinvested dividends, well ahead of the S&P 500’s 20%.

Much of the rise is driven by the elation of recovery from near-death. For many REITs, 2020 was the year from hell, as millions of people lost their jobs and stayed home, cutting off revenue from hotels, offices, shopping centres and other properties.

The FTSE Nareit All Equity REITs index fell 5.1% last year, including dividends. That was its worst return since 2008, when the index lost 37.7%. (Equity REITs own real estate; mortgage REITs lend against it.)

In March 2020 alone, REITs specializing in apartments lost 22.6%; hotels and resorts, 36.6%; retailing, 42.7%; regional malls, 54%.

Real-estate owners and operators had little choice but to hoard cash. Dividends at equity REITs, which had hit a total $14.7 billion in the fourth quarter of 2019, fell by almost one-third to $10.1 billion in the third quarter of 2020. (They’ve since rebounded by about 10%.)

More than one-third of U.S. equity REITs have suspended or reduced their dividends since Covid-19 hit, according to Cohen & Steers Inc., an investment firm in New York that manages approximately $100 billion, mostly in real estate.

Even so, for all the talk about how the pandemic would change everything, it didn’t.

Even the hardest-hit sectors are recovering. People are staying at hotels and shopping at stores; individuals and businesses alike are paying rent again. In 2021 “demand is coming back pretty much across the board,” says Calvin Schnure, senior economist at the National Association of Real Estate Investment Trusts.

Misery tends to be followed by euphoria, and money always chases returns. In 2020, investors pulled $2.1 billion out of ETFs investing in U.S. REITs and real estate. Through Sept. 13 of this year, however, these funds have attracted $10 billion in new money, according to FactSet—nearly as much as they took in over the preceding five years combined.

That means more than one-eighth of the $75 billion in total assets at these ETFs has come in over the past 12 months.

“We’re trying to temper expectations,” says Jason Yablon, head of U.S.-listed real estate at Cohen & Steers. The return on REITs “won’t be what it once was,” he adds. “Don’t expect the 30% we just got.”

The enthusiasm has even reached the backwaters of the stock market. Closed-end funds, those old-fashioned crossbreeds between a stock and a mutual fund, often specialize in real estate, and they’re hot too.

As investors take fees and differences in managerial skill into account, share prices at closed ends can be greater or less than the value of their portfolios. Over the past decade, closed-end real-estate funds have traded at an average discount to net asset value of nearly 10%. So you typically could buy a dollar’s worth of real-estate assets for about 90 cents.

This year that discount has shrunk to less than 5%, according to Refinitiv Lipper. That’s the lowest level since 2013.

The average equity REIT’s shares recently traded at more than 24 times funds from operations, a common measure of earnings. That’s an all-time high, far above the average ratio over the past two decades of 15 to 16 times.

That’s largely because earnings over the past year are still artificially depressed. It’s also partly because investors are desperate for income. To get it, they’ve bid up the prices of real-estate assets, driving down yield as a result.

At equity REITs, dividend yields—annual income distributions divided by share price—averaged 2.7% in August, down from 3.8% one year earlier.

Those payouts should rise a bit as REITs keep recovering and sharing more income with investors. The days of huge returns and fat dividend checks, however, are probably over.

Real estate makes sense as one of the lifelong cornerstones of a diversified portfolio. What doesn’t make sense is rushing to buy it because of an unsustainable hot streak.



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Even amid two international conflicts and an upcoming U.S. presidential election, some philanthropic leaders are optimistic about the direction of overall giving through 2024.

Penta spoke with heads of several non-profits and leading philanthropists to gauge whether charitable giving will continue its reported slump from 2023 or rebound alongside renewed interest in various political and economic issues.

“Contrary to what some might expect, philanthropy has had resilience in these times,” says Stacy Huston, executive director of Sixdegrees.org, a youth empowerment non-profit based in Virginia founded by actor Kevin Bacon in 2007.

Huston’s view echoes recent data from the biennial Bank of America Study of Philanthropy published last year, which found that while affluent giving is largely down, the value of the average philanthropic gift is up 19%, surpassing pre-pandemic levels.

The notion of what these gifts look like is changing, and is partially responsible for the growth. Philanthropy can be executed through more avenues than ever, whether through celebrity association, tech titans stewarding large endowments, or  athletes using their platforms to advocate for and create meaningful change.

“The industry and movement is creating new models, and you want to get it right,” says Scott Curran, CEO of Chicago-based Beyond Advisers. “No one should take their foot off the gas pedal.”

Curran spent a number of years with the Clinton Foundation in its infancy before leaving in 2016 to open his own consultancy, which focuses on philanthropy strategy at the highest levels. Curran and his team work with celebrities, athletes, multi-generational family foundations, and other affluent givers who need guidance in directing their philanthropic efforts. It’s a growing area of interest: Over half of affluent households with a net worth between US$5 million and US$20 million have, or are planning to establish, “some kind of giving vehicle” within the next three years, according to the Bank of America report.

Corporate philanthropy, rather than individual giving, is the cornerstone of Marcus Selig’s work as chief conservation officer at the National Forest Foundation, a Congressionally chartered non-profit based in Montana responsible for protecting millions of acres of public lands.

“Our outlook is business as usual,” he says, advising that giving may slow down, but not enough for the foundation to change course.

Factors such as political polarisation in the U.S. and the wars in Eastern Europe and the Middle East are pushing nonprofits to consider their niche, and how they might work with other groups, both on the corporate and philanthropic levels, Selig says.

“It leads to a little more sharing on the ground in what needs to be done,” he adds.

Steve Kaufer , founder of Massachusetts-headquartered e-commerce giving platform Give Freely and founder of TripAdvisor, says that the economy has a much bigger role in election years, as he looks to build and grow something that can act as a “counterbalance.”

“There’s a trend towards democratisation, and acting collectively can lead to greater impact,” he says.

Kaufer’s new platform hopes to leverage the everyday philanthropist through online shopping dollars to benefit major charity partners like UNICEF and charity:water, who earn funds as shoppers choose an organisation to benefit through an online clickthrough process.

“Whether a good year or bad year, e-commerce will continue to keep growing,” he says. “Nobody doubts that.”

Whether a legacy foundation, corporation or individual, the political landscape this year is requiring some to exercise caution as they consider what their own charitable actions might be and how it could be viewed more broadly. For the personal philanthropist, every move is now scrutinised more closely. On the nonprofit side, entities are exercising more due diligence to understand if a specific donor aligns with their mission and that there aren’t any underlying issues that could cause greater pushback.

“You have to be able to walk the walk,” Huston says. “For example, we’ve had to turn down very large donor checks from corporations because there’s a Reddit stream calling them out on their human rights practices.”

She adds that even a routine charity activation could now be aligned with a political party, and that adds complexities to how a higher-profile organisation like Six Degrees can activate, especially as the film Footloose turns 40 in 2024 (which Bacon starred in).

“A lot of organisations and states want to align themselves with this feel good moment, and we should be able to stand side by side with everyone, but we have to be aware,” she says.

Another topic attracting donor interest today is  mental health, an area that historically has been underfunded and under-resourced by philanthropy, according to Two Bridge partner Harris Schwartzberg, who has been closely linked to the mental health space for more than a decade.

Today, the issue for mental health nonprofits is less about resources and more about societal divisiveness and polarisation around the topic. There’s an “overwhelming demand” for solutions, but the space is in a “perfect storm” for the broader political issues to make things worse, Schwartzberg says.

In Curran’s opinion, the storms brewing are troublesome, but they are also creating new opportunities for corporate and personal giving. The  current state of philanthropy is one of “dynamic, expansive, and blurred lines,” meaning a careful blending of targeted giving combined with an understanding of the broader geopolitical landscape could lead to a successful overall philanthropic strategy.

“There are a lot of headlines that distract, but shouldn’t,” he says. “2024 needs more serious philanthropists than ever.”

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