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?
Image source: Getty Images
'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.
