Investing For Income In A World Without Any
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    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,623,020 (+0.08%)       Melbourne $974,710 (-0.81%)       Brisbane $992,583 (-1.37%)       Adelaide $896,270 (+0.26%)       Perth $892,481 (+0.31%)       Hobart $726,595 (-0.35%)       Darwin $664,958 (+1.76%)       Canberra $1,012,150 (+0.04%)       National $1,048,965 (-0.14%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $751,258 (-0.23%)       Melbourne $495,378 (+0.24%)       Brisbane $583,696 (-1.32%)       Adelaide $453,443 (-0.76%)       Perth $458,999 (+2.21%)       Hobart $509,191 (+0.99%)       Darwin $362,436 (+1.68%)       Canberra $497,643 (+0.69%)       National $536,245 (+0.06%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 9,903 (-109)       Melbourne 14,181 (+71)       Brisbane 8,075 (-54)       Adelaide 2,184 (+36)       Perth 5,723 (+16)       Hobart 1,216 (+3)       Darwin 275 (+14)       Canberra 888 (+5)       National 42,445 (-18)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 8,719 (+28)       Melbourne 8,357 (+7)       Brisbane 1,747 (+49)       Adelaide 405 (+23)       Perth 1,442 (+5)       Hobart 211 (-1)       Darwin 399 (-7)       Canberra 1,018 (+16)       National 22,298 (+120)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $800 (-$20)       Melbourne $620 ($0)       Brisbane $635 (-$5)       Adelaide $610 (-$10)       Perth $675 (-$20)       Hobart $550 ($0)       Darwin $700 (-$30)       Canberra $680 ($0)       National $666 (-$12)                UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $750 ($0)       Melbourne $595 ($0)       Brisbane $625 (-$5)       Adelaide $510 (+$10)       Perth $630 (+$5)       Hobart $470 (+$5)       Darwin $560 (+$30)       Canberra $550 ($0)       National $597 (+$4)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,884 (-132)       Melbourne 6,585 (+256)       Brisbane 4,488 (+137)       Adelaide 1,589 (+2)       Perth 2,880 (+283)       Hobart 411 (+13)       Darwin 93 (-4)       Canberra 632 (+17)       National 22,562 (+572)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 10,906 (+381)       Melbourne 6,312 (+294)       Brisbane 2,339 (+54)       Adelaide 371 (+21)       Perth 797 (+18)       Hobart 143 (+3)       Darwin 126 (+3)       Canberra 816 (+23)       National 21,810 (+797)                HOUSE ANNUAL GROSS YIELDS AND TREND         Sydney 2.56% (↓)     Melbourne 3.31% (↑)      Brisbane 3.33% (↑)        Adelaide 3.54% (↓)       Perth 3.93% (↓)     Hobart 3.94% (↑)        Darwin 5.47% (↓)       Canberra 3.49% (↓)       National 3.30% (↓)            UNIT ANNUAL GROSS YIELDS AND TREND       Sydney 5.19% (↑)        Melbourne 6.25% (↓)     Brisbane 5.57% (↑)      Adelaide 5.85% (↑)        Perth 7.14% (↓)     Hobart 4.80% (↑)      Darwin 8.03% (↑)        Canberra 5.75% (↓)     National 5.79% (↑)             HOUSE RENTAL VACANCY RATES AND TREND       Sydney 0.8% (↑)      Melbourne 0.7% (↑)      Brisbane 0.7% (↑)      Adelaide 0.4% (↑)      Perth 0.4% (↑)      Hobart 0.9% (↑)      Darwin 0.8% (↑)      Canberra 1.0% (↑)      National 0.7% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 0.9% (↑)      Melbourne 1.1% (↑)      Brisbane 1.0% (↑)      Adelaide 0.5% (↑)      Perth 0.5% (↑)      Hobart 1.4% (↑)      Darwin 1.7% (↑)      Canberra 1.4% (↑)      National 1.1% (↑)             AVERAGE DAYS TO SELL HOUSES AND TREND       Sydney 29.8 (↑)        Melbourne 31.6 (↓)     Brisbane 30.4 (↑)        Adelaide 25.3 (↓)       Perth 35.7 (↓)     Hobart 33.0 (↑)      Darwin 43.9 (↑)      Canberra 31.9 (↑)      National 32.7 (↑)             AVERAGE DAYS TO SELL UNITS AND TREND       Sydney 30.2 (↑)      Melbourne 31.7 (↑)        Brisbane 27.1 (↓)       Adelaide 25.5 (↓)     Perth 37.5 (↑)        Hobart 38.0 (↓)       Darwin 37.9 (↓)     Canberra 41.2 (↑)        National 33.6 (↓)           
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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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UBS analyzed income and wealth data from 56 markets, representing “92% of the world’s wealth,” in its Global Wealth Report 2024, released Wednesday. The report’s overarching theme found that global wealth grew by 4.2% in 2023, offsetting a loss of 3% in 2022. Even in the face of continued inflation, adjusted global wealth grew by 8.4%.

However, overall global wealth growth is down, from an annual average of 7% between 2000 and 2010 to just over 4.5% between 2010 and 2023, the report said. This equates to a reduction in global wealth of almost one-third.

The remaining growth seems to be continuing on pace in the world’s most developed and already prosperous nations. In the U.S., average wealth per adult grew by nearly 2.5% and the country accounts for 38%, roughly 22 million, of all millionaires worldwide.

Mainland China came in second with just over 6 million millionaires, followed by 3 million  in the U.K.

The report also took a look at the growing issue of wealth transfer. Over the next 25 years, US$83.5 trillion of global wealth will be transferred to spouses and the next generation. UBS estimates 10% of that will be transferred by women and US$9 trillion will shift between spouses.

Wealth in the Asia-Pacific region grew the most—nearly 177%—since the report began tracking data 15 years ago. The Americas come in second, at nearly 146% growth. Surprisingly, Turkey has enjoyed the most wealth growth per adult of any individual nation in the last 15 years—more than 1,700% in local currency.

The world’s wealthiest class continues to be a small, tightly concentrated group. According to the report, only 12 people hold between US$50 billion and US$100 billion and just 14 people hold US$2 trillion of the world’s wealth. The U.S. and Canada are home to individuals holding 44% of this wealth, while another 25% is held by people in Western Europe.

UBS data suggests that global wealth will continue to grow most in emerging markets, with some countries experiencing millionaire growth of up to 50% over the next five years.

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