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Australian property among top performing financial sectors

Australian property has risen from being among the weakest to one of the strongest markets.
Inherent long-term strength in the Australian property market has allowed the sector to become one of the nation's best performing, according to the latest S&P/ASX 200 Real Estate index.

It comes after years of the property market having lagged behind when the financial sector as a whole was weak and people were not buying homes. 

Experts working on the report stated that higher payouts and low volatility were helping to attract investors who are seeking out better yields from their money.

This has seen property prices rise in the last year in major cities across the nation by an average of 11 per cent. As a result of these rises, the property sector is now behind only utilities and beating groups including miners and banks.

"Many of the bigger players, they’ve all got an earnings stream coming from development, and they’ve got their property management arm as well providing stable rental income," said Evan Lucas, Melbourne-based market strategist at IG Ltd.

There could be further long-term strength ahead for the market as well, with the latest figures showing that there was a small decline in price rises in May, which could well be indicative of a maturing in the sector.

Posted by Craig Francis

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