The latest CoreLogic Home Value Index results are in and it's another storming month for property owners.
In October 2019, Sydney house prices went up 1.7%, Melbourne house prices went up 2.3% and national house prices increased 1.2%. That means that over the past three months, Sydney and Melbourne house prices have gone up 5% and 5.5% respectively. That's a quick recovery.
Here are some ASX shares that are likely to profit from the recovery:
REA Group Limited (ASX: REA) and Domain Holdings Australia Ltd (ASX: DHG)
The two property advertising portal businesses will be loving this recovery. It should mean more listings as homeowners become more confident. More listings means more revenue and profit.
Higher house prices may also allow them to implement stronger price rises even if they just maintain the same fee percentage compared to the property price.
Of the two I'd probably pick REA Group for its stronger market position and overseas investments.
Brickworks Limited (ASX: BKW)
Brickworks has one of the largest building product businesses in Australia, with Austral Bricks being a leading brand. It will take a while but rising house prices should lead to more construction starting with higher approvals. The seasonally adjusted estimate for total dwellings approved increased by 7.6% in September 2019 according to the ABS.
Even without property prices recovering, I think Brickworks looks like a solid buy for its US expansion, its joint venture property portfolio and its investments.
Genworth Mortgage Insurance Australia (ASX: GMA)
The lenders mortgage insurance LMI) business is seeing a lot more activity. In the September 2019 quarter it saw 26.4% growth of new insurance written (NIW) and 11.9% growth of net earned premium (NEP).
Two days ago it also announced that it had renewed its LMI supply and service contract with Commonwealth Bank of Australia (ASX: CBA), which accounted for 53% of gross written premium in the first half of FY19.
Foolish takeaway
At the current prices my preferred choice would be Brickworks for its diverse earnings and good asset base. REA Group is a high-quality company but looksa bit expensive whilst Genworth isn't the type of business I like investing in.
