Larry Schlesinger | 1 July 2013

Residential property’s steady rise as gold sinks: Daily Property Observer list

Residential property’s steady rise as gold sinks: Daily Property Observer list

Residential property was a solid investment play in the 2013 financial share as shares soared but gold took a plunge.

Depending on where you invested, the property market provided investors with total returns – rent plus capital gain - ranging from 3.5% in Hobart to 12.7% in Darwin, according to RP Data-Rismark.

Total property return of 8.5%

The aggregate total return across the eight capital cities was a solid 8.5% with Perth and Sydney both returning in excess of 10% with Melbourne managing just 7.3%.

RP Data-Rismark recorded capital city dwelling prices up 3.8% for the financial year, substantially better than the 3.6% reduction recorded over the 2012 financial year.

A-REIT total return of 24.2%

Arguably the best place to put your money in the listed property trust sector.

According to Goldman Sachs A-REITS analyst, the S&P ASX200 XPJ index (A-REIT sector) was up 17.4% over 2013 on a share price basis.

If you include dividends, the sector generated a total return of 24.2%.

Shares up 14%

Outside of the listed property space, putting your money in shares was a good option with the ASX rising 14% over the course of the year from 4,133 points to 4,802.

ASX 200 up 17%

Gains were even stronger across the ASX 200, with share prices up 17% across the benchmark index, the highest total returns since the global financial crisis.

Super returns likely around 15.5%

In line with the stronger share market, super funds also thrived.

Forecasts are for growth super funds to generate a median return 15.5% for the year to June 30, according to super research firm Chant West. This would be highest single financial year return in the past 16 years. Balanced funds are forecast to return 12%.

Cash deposits returning 3.24%

For investors with no risk appetite, putting you money in the bank generated a return of just 3.24% according to the UBS Bank Bill, which is a proxy measure for returns from cash.

Gold values down 25%

Gold was not a good investment option in the past 12 months with values falling 25%.

The precious metal started the year at $US1600, rose to US$1,800 in October, but then started falling in April and is currently trading at around US$1,200 per ounce.

Aussie dollar down 8%

And holding Australian dollars was also not a good bet with the currency falling 8% from parity at the start of the financial year to just under 92 cents currently.

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