ASX property shares and real estate investment trusts (REITs) led the ASX 200 market sectors this week, gaining a stellar 5.9% over the past five trading days.
The S&P/ASX 200 Index (ASX: XJO) gained 1.71% over the week to finish at 7,699.4 points on Friday.
All market sectors finished the week in the green.
Let's check out the week's news.
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Real estate shares led the ASX sectors this week
So, we know why this is happening, don't we?
It's all about interest rates, and mounting speculation that the Reserve Bank (RBA) will keep rates on hold. And not just at its first meeting of 2024 next week. In fact, maybe the rate hiking cycle is over.
Optimism on rates was boosted this week by better-than-expected inflation numbers. The consumer price index recorded a 4.1% rise in the December quarter, which was below the RBA's expectation of 4.5%.
Investors were seriously excited by this news, pushing the ASX 200 to a new record high on Wednesday.
CBA head economist Gareth Aird was definitive in his prediction for the RBA decision next week:
We expect the RBA will leave the cash rate unchanged next week and see no chance of any other outcome. We expect the RBA to lower their end-2024 inflation forecast to a little above 3%. And we anticipate they will forecast inflation returning to the mid-point of the target band by mid-2026.
CBA reckons the RBA will start cutting interest rates in September. Aird said his economics team expects total cuts of 75 basis points this year, and another 75 in 1H 2025.
Over in the United States this week, the Federal Reserve kept interest rates on hold for a fourth consecutive month at 5.25% to 5.5%.
Among the large-cap real estate stocks, Goodman Group (ASX: GMG) shares rose by 7.34% to finish at $26.98 per share this week. Scentre Group (ASX: SCG) shares rose to $3.10, up 5.98% over the week.
Stockland Corporation Ltd (ASX: SGP) shares gained 4.25% to finish at $4.54 on Friday. The Vicinity Centres (ASX: VCX) share price lifted 4.35% to $2.04, and Mirvac Group (ASX: MGR) shares rose 3.1% to $2.16.
Check out how ASX shares performed compared to real property prices in the month of January.
ASX 200 market sector snapshot
Here's how the 11 market sectors stacked up this week, according to CommSec data.
Over the past five days:
| S&P/ASX 200 market sector | Change this week |
| A-REIT (ASX: XPJ) | 5.9% |
| Energy (ASX: XEJ) | 3.8% |
| Information Technology (ASX: XIJ) | 2.97% |
| Consumer Staples (ASX: XSJ) | 2.64% |
| Healthcare (ASX: XHJ) | 2.33% |
| Communication (ASX: XTJ) | 1.73% |
| Consumer Discretionary (ASX: XDJ) | 1.5% |
| Financials (ASX: XFJ) | 1.41% |
| Materials (ASX: XMJ) | 1.13% |
| Industrials (ASX: XNJ) | 1.06% |
| Utilities (ASX: XUJ) | 0.8% |
