Buying a house is not as good as buying REITs? In the United States, REITs offer diverse opportunities and the market outlook is optimistic!
2024/10/26
• Is Buying REITs Better Than Buying Property?
Since 2000, US home prices have shown a long-term upward
trend, but US REITs have outperformed during the same
period, demonstrating that REITs' diversified industry
exposure can better capture investment opportunities from
economic transformation over the long term.
• REITs Offer Diverse Opportunities - Both Income and
Growth:
The US is the world's largest REITs market, currently
offering access to over 13 different types of real estate
opportunities. Beyond traditional residential, office, and
shopping center REITs, non-traditional REITs like healthcare
facilities, warehouses, and data centers have emerged in
recent years. Thus, investing in REITs can meet investors'
income needs while capturing growth opportunities in
emerging economic sectors.
• Rate Cut Expectations Still Outweigh Hikes - REITs
Benefits Emerging:
Although the Fed may maintain current policy rates for
longer, future rate cuts remain more likely than hikes.
Since 2000, there have been three instances when the Fed
paused rate hikes, with US REITs delivering strong average
performance over the subsequent 1, 3, and 5 years. When the
next rate cut cycle begins, US REITs are expected to
continue attracting capital inflows, supporting future
performance.
US REITs Have Strong Long-Term Performance and Could
Benefit From the Fed's Coming Rate Cut Cycle
US Home Price Index vs. US REITs Index Performance Since
2000
Source: Bloomberg, data as of December 31, 1999-January
31, 2024.
Average Performance of US REITs 1, 3, and 5 Years After the Fed Paused Rate Hikes (Three Instances Since 2000)
Source: Bloomberg, data as of the average performance of
US REITs 1/3/5 years after the Fed's last rate hikes on
May 16, 2000; June 29, 2006; and December 19, 2018. US
Home Price Index is S&P/Case-Shiller US National Home
Price Index, US REITs Index is FTSE NAREIT All Equity
REITs Index.
Past performance is not a reliable indicator of current
or future results. Illustrations based on the above
indices - investors cannot invest directly in indices.
Housing, Clothing, Food, Transportation, Education,
Entertainment
US REITs Let You Be Landlords of Various Property
Types
• REITs originated in the US in 1960, and the US remains the world's largest REITs market today, with a 67% market share*.
• US REITs invest in diversified property types including apartments, office buildings, hotels, shopping malls, warehouses, data centers, etc. Famous properties like New York's Empire State Building, Las Vegas' Fashion Show Mall, Waikiki Beach's Hilton Hawaiian Village, and Amazon's official fulfillment centers are all potential REIT investments.
Source: *EPRA, J.P. Morgan Asset Management, data as
of December 31, 2023.