- RBA’s interest rate hike for the third time on Tuesday has made annual rent in Australia touch a 14-year high.
- Real estate stocks have fallen prey to the ongoing inflation and repetitive hike in RBA’s interest rates.
- Meanwhile, The S&P/ASX200 is up today, gaining 0.38% to 6,619.60. The S&P/ASX 200 Real Estate sector also opened up in green territory.
On Tuesday (5 July), the Reserve Bank of Australia (RBA) further announced another hike in the interest rates. This was the third time in the past couple of months that RBA increased its interest rate. The latest hike in interest rates is said to be adding around AU$137 per month to a mortgage of AU$500,000 or AU$499 a month to a loan worth AU$75,000.
All the businesses in Australia have suffered due to RBA’s hike in interest rate in past couple of months including the real estate sector. The annual rent growth in Australia has hit a 14-year high as a result of RBA’s interest rate growth. House rents have considerably reduced to some extent in the past couple of years due to the COVID-19 lockdowns. Now that the lockdowns are lifted, the real estate sector is facing the challenges of inflation and interest rate hike.
Today, the S&P/ASX200 Real Estate sector (INDEXASX:XRE) has opened a tad higher at 3,135.80 at 10:40 AM AEST. Yesterday too, the index closed in the green zone after gaining 3.136% to 3133.9 on the ASX.
Here, we talk about four leading ASX-listed real estate stocks- Unibail, Mirvac, Dexus, and Scentre Group. We have analysed their performance amidst the rising interest rate and inflation.
Unibail-Rodamco-Westfield (ASX:URW) is one of the top most ASX-listed real estate stocks. Unibail’s shares were spotted trading 0.564% higher at AU$3.560 per share at 10:45 AM AEST on the ASX today (7 July).
The share price of Unibail has lost more than 40% in past one year and went down almost 30% on year-to-date basis (as of 10:22 AM AEST on the ASX today, 7 July).
Mirvac Group (ASX:MGR)
Another significant real-estate stock on the ASX is the Mirvac Group (ASX:MGR). The shares of this real estate investment manager were found trading 0.236% higher at AU$2.115 per share at 10:45 AM AEST on the ASX today (7 July).
Shares of Mirvac have shed more than 28% in last one year (as of 10:46 AM AEST on the ASX today, 7 July).
Image source: © Feverpitched | Megapixl.com
Shares of another noteworthy real estate stock, Dexus (ASX:DXS), gained 0.432% to trade at AU$9.280 per share at 10:50 AM AEST on the ASX today (7 July).
Just like any other real estate company, Dexus’ share price also struggled in the past one year due to market volatility. As a result, the share price of the Australian Real Estate Investment Trust has fallen over 12% on the ASX over past 12 months. On the other hand, the company’s year-to-date share price also fell over 17% (as of 10:48 AM AEST on the ASX today, 7 July).
Scentre Group (ASX:SCG)
The last real estate stock on our list today is the Scentre Group (ASX:SCG). The shares of this property managing company were spotted trading 0.370% higher at AU$2.710 per share at 10:54 AM AEST on the ASX today (7 July).
Like other real estate companies, the shares of Scentre group also struggled through COVID-19 lockdown in the past couple of years. As a result of that, its share price has fallen almost by 3% on the ASX in last 12 months. Similarly, owing to the ongoing inflation and economic crisis, Scentre’s year-to-date share price also fell almost by 17% (as of 10:52 AM AEST on the ASX today, 7 July).