The 2 ASX real estate shares everyone's piling on to right now

Property stocks have been rocketing the past few weeks, and these companies are the ones investors are flocking to.

| More on:
A man sits at a desk holding a small replica house in his hand, upset at the sale of his property.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Despite a difficult 18 months with steep interest rate rises, there is now a resurgence of ASX investor attention on the real estate sector.

The S&P/ASX 200 Real Estate (ASX: XRE) index is now 15.4% higher since 30 October.

Stock markets tend to be much more forward-looking than real life. Perhaps this explains why this frenzy is happening despite CoreLogic data for November showing houses are on the market longer nationally and sales volumes have dived.

Investment platform Selfwealth Ltd (ASX: SWF) this week revealed that ASX real estate shares currently have the strongest conviction of all industries among its investors.

"A key indicator of investor sentiment is the ratio at which they're buying compared to selling," said Selfwealth brand and content lead Robert Marfell. 

"And for the Real Estate sector, our data shows the ratio of buys-to-sells is leagues above all others."

So which property stocks are Australians loving at the moment?

'Being greedy while others are fearful'

Two real estate shares stand out above the rest, according to SelfWealth: Lendlease Group (ASX: LLC) and Goodman Group (ASX: GMG).

"We found that investors bought increasing amounts of both Goodman Group and Lendlease from October to late November this year, far more than any other in the sector," said Marfell.

"The laggard in the sector was Vicinity Centres (ASX: VCX), which saw a sell-off for each quarter of 2023."

Lendlease shares are down 12.9% for the year and have lost a terrible 44% over the past five years.

A poll indicated that many investors are now thinking that LendLease is a bargain at the current price.

"44% of Selfwealth buyers of Lendlease believed the 'stocks were undervalued' while another 14% bought Lendlease 'to align with a target portfolio'," said Marfell.

"The consistent rise in buy trades indicates Selfwealth investors are being greedy while others are fearful."

For industrial property manager Goodman, its stock price has risen 35% in 2023 — so investor interest certainly couldn't be attributed to bargain hunting.

In fact, 24.5% bought in to "align with target portfolio", 20.9% cited diversification, and 19.8% thought Goodman Group's "earnings potential looks good".

It's not just amateur investors going mad for Goodman.

According to CMC Invest, a whopping 11 out of 12 analysts currently rate the stock as a buy.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Real Estate Shares

Three smiling corporate people examine a model of a new building complex.
Earnings Results

2 ASX 200 real estate shares leaping higher on earnings news

ASX 200 investors are bidding up the two leading real estate stocks following their earnings reports.

Read more »

Smiling office workers fling a stack of papers into the air.
Share Market News

Here's how the ASX 200 market sectors stacked up this week

The ASX 200 gained 1.71% over the week and one market sector soared a whopping 5.9%!

Read more »

Real estate agent and client exploring property.
Real Estate Shares

Lendlease share price charging higher on $1.3 billion Stockland deal

ASX 200 investors are bidding up the Lendlease share price on Monday morning.

Read more »

Smiling office workers fling a stack of papers into the air.
Share Market News

Here's how the ASX 200 market sectors stacked up this week

The ASX 200 gained 0.5% and the real estate sector led the way this week.

Read more »

Mini house on a laptop.
Real Estate Shares

'Clear path' to 20%+ earnings growth: The ASX 200 stock doing all the right things

Cutting costs while adding customer volumes could prove to be an excellent catalyst for these shares.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Real Estate Shares

I invested $2,000 in this beaten-up ASX share which had dropped 60%!

I’m aiming to build my wealth with this stock.

Read more »

a woman struggles to hold a large pile of folders and documents with only her eyes appearing over the top of the pile.
Share Market News

Here's how the ASX 200 market sectors stacked up this week

The ASX 200 gained 1.16% amid one key piece of economic news that drove strong gains in the top two…

Read more »

Two businessmen look out at the city from the top of a tall building.
Real Estate Shares

Is now the time to buy this high-yielding ASX dividend share?

We consider the prospects of this real estate investment trust.

Read more »