What is the outlook for REITs in 2024? (2024)

What is the outlook for REITs in 2024?

After lagging equities the past two years, REITs offer an attractive investment opportunity in 2024. The headwind of higher bond yields and central bank rate hikes is likely to abate and may turn into a tailwind if our view about an impending economic slowdown and decelerating inflation trends is correct.

How will REITs perform in 2024?

The REIT sector had a rough start to 2024 with a -5.72% total return in January. Large cap REITs (-4.79%) outperformed their smaller peers in January. Micro cap REITs (-8.39%) averaged the steepest declines. Only 9.55% of REIT securities had a positive total return in January.

What is the global outlook for 2024 in real estate?

“While event risk remains high, 2024 appears to be a pivot point, moving towards greater liquidity in real estate markets. Though there are good reasons why investors have been hesitant, we're moving towards a period where there's greater clarity. It should be an opportune time to buy.”

What is the best time to buy REITs?

REITs historically rebound when interest rates pivot and have the potential for rent growth. Realty Income, Agree Realty, VICI Properties, Essential Properties Trust, and American Tower are strong picks for long-term growth and income.

Will REIT bounce back?

In fact, REIT total returns bounced back with impressive performance in the last quarter of 2023. Based on historical experience, the convergence of the wide valuation gap between public and private real estate will likely ensure continued REIT outperformance into 2024.

Will REITs recover in 2024?

But despite that, most REITs have kept growing their dividend. Most of them hiked in 2022, 2023, and will hike again in 2024. This is the ultimate proof that REITs are doing better than what the market appears to believe.

Are REITs still a good investment in 2024?

April 2, 2024, at 2:50 p.m. Real estate investment trusts, or REITs, are a great way to invest in the real estate sector while diversifying your options. Real estate investments can be an excellent way to earn returns, generate cash flow, hedge against inflation and diversify an investment portfolio.

Will house prices go down in 2024 usa?

Most experts do not expect a housing market crash in 2024 since many homeowners have built up significant equity in their homes. The issue is primarily an affordability crisis. High interest rates and inflated home values have made purchasing a home challenging for first-time homebuyers.

What is the current outlook for investing in real estate?

Retail real estate fundamentals are expected to remain strong due to the scarcity of new construction deliveries over the past decade. The industrial market is expected to remain healthy, with net absorption on par with 2023 levels.

What is the JLL 2024 multifamily outlook?

While JLL forecasts 1.3 million new home starts in 2024 this will track slightly below the average new household formation rate, maintaining the supply gap. Within multifamily, completions are spiking and will reach 658,000 units in 2024, double the average levels of the last cycle.

How long should I hold a REIT?

"Both public and non-public REIT investments should be considered long-term, and that could mean different things to different folks, but in general, investors who typically invest in REITs look to hold them for a minimum of three years, and some of them could hold them for 10+ years," Jhangiani explained.

What I wish I knew before investing in REITs?

A lot of REIT investors focus too way much on the dividend yield. They think that a high dividend yield implies that a REIT is cheap and a good investment opportunity. In reality, it is often the opposite, and the dividend does not say much, if anything, about the valuation of a REIT.

Do REITs lose value when interest rates rise?

Rising interest rates hurt not only the value of REITs' property holdings but also the cost of debt to finance those properties or even refinance already-owned assets.

Why not to buy REITs?

Non-traded REITs have little liquidity, meaning it's difficult for investors to sell them. Publicly traded REITs have the risk of losing value as interest rates rise, which typically sends investment capital into bonds.

What is the future outlook for REITs?

As the REIT industry continues to evolve, its future growth prospects remain promising. According to the reports, the global REIT market is projected to reach a staggering $5.8 trillion by 2030, growing at a CAGR of 7.1% during the forecast period of 2023-2030.

Is it safe to invest in REITs now?

There are three key reasons to invest in listed REITs right now, starting with the fact that REITs have outperformed stocks and bonds when yields and growth move lower. Demand is health while supply is constrained, and REIT valuations relative to the broader equity market are meaningfully below the historical median.

Why should REITs rally in 2024?

In 2021 and 2022, amid a strong economy driven by cash-rich consumers, demand heavily outpaced supply across most sectors of commercial real estate. This spurred developers to start a huge slate of projects that began to come to market in 2023 and will continue over the course of 2024.

What is the expected return of REITs?

An Investor can expect a rental yield of 7% to 9% plus capital appreciation of 4% to 5% over a long period in REIT investments i.e. total returns of 12% to 14%. Comparing these returns with the current cost of funding in India, the returns are at par / slightly higher.

Can REITs go out of business?

What this means is that REITs are ideal borrowers for banks. They are exactly who they want to do business with because they know that the risk of a REIT bankruptcy is extremely low. Just look at the past. There have been very few REIT bankruptcies over the past 50+ years.

What is the 90% rule for REITs?

How to Qualify as a REIT? To qualify as a REIT, a company must have the bulk of its assets and income connected to real estate investment and must distribute at least 90 percent of its taxable income to shareholders annually in the form of dividends.

Why are REITs losing value?

Answer: Because REIT prices are forward-looking and front-run future pain, while the market prices of real estate properties themselves lag real-time increases in interest rates and economic weakness.

Which REIT has the highest dividend?

Should I sell now or wait until 2024?

Best Time to Sell Your House for a Higher Price

April, June, and July are the best months to sell your house in California. The median sale price of houses in June 2023, was $796,400, which is expected to grow more in 2024. However, cities like Arcadia and San Mateo follow an upward trend throughout the year.

Will prices go down in 2024?

J.P. Morgan Research forecasts global core inflation will remain sticky at around 3% in 2024. “Although headline inflation is expected to drop, we look for a fading of goods price deflation.

Will house prices go down in Florida in 2024?

According to Zillow, home price appreciation is expected to slow down significantly in the coming years, with a predicted increase of only 3.4% for 2024. This could provide relief to buyers who have been priced out of the market in recent times.