ASX real estate investment trusts (REITs) provide a handy solution for investors interested in property but unable to afford residential real estate.
They're also a great option for investors who do not wish to be bothered by bad tenants, leaking ceilings, and a litany of ongoing costs.
In this article, we compare the capital growth of the largest ASX REITs on the share market to residential property across the nation.
At a macro level, ASX REITs delivered a superior performance to physical property on a growth and total returns basis in FY25.
The S&P/ASX 200 Real Estate Index (ASX: XPJ) rose by 10.25% and produced total gross returns, including dividends, of 13.97% in FY25.
This was slightly superior to the benchmark S&P/ASX 200 Index (ASX: XJO), which rose 9.97% and provided total returns of 13.81%.
Meantime, the national median home value, which reflects all types of property in a single data point, rose by 3.4% and produced total returns, including weekly rents, of 7.1% in FY25, according to Cotality data.
The national median house price rose by 3.7% to $905,076 and delivered total returns of 7.2%. This equated to a 3.5% gross yield.
The Australian median apartment price lifted by 2.3% to $686,399, with total returns of 7%. This equated to a 4.6% gross yield.
Image source: Getty Images
Top 5 ASX REITs and how they performed in FY25
Here is the share price growth of the market's top five ASX REITs by market capitalisation in FY25.
| ASX REIT | Capital growth in FY25 |
| Goodman Group (ASX: GMG) | (1%) |
| Scentre Group Ltd (ASX: SCG) | 15% |
| Stockland Ltd (ASX: SGP) | 29% |
| Vicinity Centres Ltd (ASX: VCX) | 34% |
| GPT Group (ASX: GPT) | 22% |
Residential real estate in FY25: Houses
Here is the price growth of houses in each city and regional property market in FY25.
| Property market | Capital growth of houses in FY25 |
| Regional Western Australia | 12% |
| Regional South Australia | 11.8% |
| Regional Queensland | 8.1% |
| Adelaide | 7.7% |
| Perth | 6.5% |
| Darwin | 6.4% |
| Brisbane | 6.3% |
| National | 3.7% |
| Regional New South Wales | 3.6% |
| Regional Tasmania | 2.7% |
| Hobart | 2.3% |
| Sydney | 1.7% |
| Regional Victoria | 1.1% |
| Canberra | 0.5% |
| Melbourne | 0% |
| Regional Northern Territory | (4%) |
Residential property investment in FY25: Apartments
Here is the price growth of apartments in each city and regional property market in FY25.
| Property market | Capital growth of apartments in FY25 |
| Perth | 11.3% |
| Brisbane | 10.9% |
| Adelaide | 10.1% |
| Regional Western Australia | 9.9% |
| Regional South Australia | 7.8% |
| Regional Queensland | 7.4% |
| Regional Tasmania | 5.1% |
| Darwin | 5% |
| Regional New South Wales | 2.9% |
| National | 2.3% |
| Sydney | 0.2% |
| Regional Victoria | 0% |
| Canberra | (0.5%) |
| Hobart | (0.7%) |
| Melbourne | (1.3%) |
Interest rate cuts
Interest rate cuts are a tailwind for both ASX REITs and residential property.
Cotality's research director, Tim Lawless, said the first rate cut in February arrested market weakness from November to January:
The first rate cut in February was a clear turning point for housing value trends.
An additional cut in May, and growing certainty of more cuts later in the year have further fuelled positive housing sentiment, pushing values higher.
