ASX shares vs. property: The opportunities in 2024

Four property markets are 'in favour of buyers' while mining stocks look hot for 2024, say these experts.

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If you're considering a new investment in shares vs. property, then it's worth paying attention to the experts' analysis of where each market is right now and the opportunities that may lie ahead in 2024.

On the property front, CoreLogic says that after a strong rebound in 2023, the Australian market will be more subdued overall next year.

The Sydney and Melbourne property markets are now slowing down. Conversely, Perth, Brisbane and Adelaide are still rocketing, according to the latest data.

In the meantime, various brokers and share market analysts have released their tips for hot ASX stocks next year.

So, where are the opportunities for investment in shares vs. property in 2024?

Where are the opportunities in property?

Investors define 'opportunities' in many different ways.

For the purposes of this article, we'll define opportunities in property as markets where prices are likely to fall, or where conditions are likely to favour buyers, in 2024.

Based on this, the experts say Sydney, Melbourne, Canberra, and Hobart may be worth considering.

CoreLogic's Head of Research, Tim Lawless, says market conditions in these cities are "now in favour of buyers". This is due to a higher supply of homes for sale compared to the other capitals.

He said advertised stock levels are currently trending above five-year averages, explaining:

In these cities, market conditions are now in favour of buyers as higher stock levels provide more choice, less urgency and greater opportunities to negotiate.

The same can't be said for Perth, Brisbane and Adelaide, where advertised stock levels remain remarkably low. Perth listings are nearly -40% below their five-year average for this time of the year, while listings are more than -30% below average in Brisbane and Adelaide.

Unsurprisingly, these cities are continuing to show a consistently high rate of growth amid strong selling conditions.

Louis Christopher of SQM Research also identifies these cities as likely to be the weakest markets of 2024, and therefore favouring buyers.

He adds Darwin to the list and anticipates price falls in all five cities in his base case predictions.

Christopher forecasts -4% to 0% movement for Sydney home values and -3% to +1% movement for Melbourne and Darwin. He attributes the softer anticipated growth in the two biggest capitals to high interest rates and rising unemployment.

Christopher is also tipping a fall in Canberra home values of between -8% and -4% in 2024. This is due to reduced Federal Government spending and rising supply due to many new apartment completions.

Where are the opportunities in ASX shares?

Top broker Morgan Stanley likes the look of ASX mining shares in 2024. It says commodity prices should remain strong, and the weaker dollar will be helpful, too.

The most important commodity of all for Australia — iron ore — has surged beyond US$140 per tonne in recent weeks. It is up from about US$117 in January.

Meantime, the Australian dollar is fetching 68.59 US cents today. This is largely in line with where it started the year.

The currency dropped to a 12-month low of about 63 US cents in October. It hit a high of about 71 US cents in February.

In light of all this, Morgan Stanley's model portfolio has bigger positions in BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO).

Bell Potter is also positive on mining stocks and companies providing mining services. Among its 2024 picks are Mineral Resources Ltd (ASX: MIN), Regis Resources Ltd (ASX: RRL) and Santana Minerals Ltd (ASX: SMI).

In a recent note, analysts David Coates and Bradley Watson explained:

Looking to CY24, we are optimistic about the outlook for gold and copper in particular.

With rate cuts expected through CY24, supportive geopolitical factors and the prospect of real interest rates and the US dollar coming off multi-year highs, gold and gold equities look like attractive exposures into CY24.

The outlook is also very positive for ASX uranium shares due to a surging commodity price.

Uranium breached the US$90 per pound mark this week and is up by almost 90% over the past 12 months.

Tribeca fund manager Guy Keller describes uranium as a "new lithium", driven by Chinese demand.

In a recent Australian Financial Review (AFR) article, Keller explained:

China wants to go from 30 million pounds a year of consumption to 150 million in just 15 years.

When China makes a structural change to embrace a raw material it's short of domestically, it creates a multi-decade demand for that raw material.

Bell Potter also likes tech shares for 2024 and rates Life360 Inc (ASX: 360) and Task Group Holdings Ltd (ASX: TSK) as buys.

Analysts Chris Savage and Michael Ardrey explain:

We have a positive or constructive view on the outlook for the tech sector given the consistent increases in interest rates both domestically and internationally over the last 18 months now appear to be nearing or at an end.

We note there has been a strong rally in tech stocks in the US over the past couple of months – the NASDAQ is now around a two year high – but there has not been anywhere near as strong a rally in Australia.

We therefore believe a rally in tech stocks domestically is overdue and, if and when it comes, is likely to be led by large caps with the mid and small caps to eventually follow.

Analyst John Hester also reckons there are buy-the-dip opportunities in the healthcare sector, saying:

With many companies currently trading at depressed valuations, there are stock picking opportunities for those with solid balance sheets to ride out the cyclical downturn and clear catalysts to drive momentum.

Bell Potter's healthcare picks include Telix Pharmaceuticals Ltd (ASX: TLX) and Cyclopharm Ltd (ASX: CYC).

Shares vs. property: How do you decide?

Diversification is a key theme for all investors, and helpfully, it kinda nullifies the shares vs. property debate. With enough time on your side and reasonable financial means, you'll be able to do both.

To help you with the decision, check out our article comparing property rental returns vs. shares dividends.

You might also like to review the 10-year returns of each asset class.

If buying and owning real property investments sounds too hard, you can always invest in bricks and mortar by purchasing ASX property stocks and A-REITs instead — here's how. mid-cap healthcare stocks. However, those that achieved material commercial milestones have generated positive shareholder returns in the last six months (NEU, DXB, 4DX and PME). With many companies currently trading at depressed valuations, there are stock picking opportunities for those with solid balance sheets to ride out the cyclical downturn and clear catalysts to drive momentum.The new class of GLP-1/GIP drugs continue to dominate news flow for their impact on weight loss and other health outcomes (e.g. lowering cardiovascular events). There is little doubt these drugs will form one of the biggest selling classes to date, with both Novo Nordisk and Eli Lilly unable to keep up with demand. ASX large-cap healthcare companies, including RMD and CSL were sold off as investors drew read throughs for what these drugs could mean for long term demand growth. Fortunately there were no adverse impacts on companies in our coverage and data suggests the sell off in large cap stocks has been overdone in any case

Motley Fool contributor Bronwyn Allen has positions in BHP Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Life360 and Telix Pharmaceuticals. The Motley Fool Australia has recommended Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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