Australia's Q2 property returns increase

Total annualised returns for Australian property increased nearly six times in the second quarter from the previous quarter, but future increases will likely be moderate, according to research company IPD.

Total returns for all Australian property types as well as income and capital, surged to 5.9 percent in the year to June from 1 percent in the year to March, IPD added.

Anthony De Francesco, managing director for Australia and New Zealand at IPD, said that the result “came from a pull back in negative capital growth."

"We will continue to see upswings but the pace will be moderate, in line with the general softening in the economy," he said, adding that annualized capital returns, which hit minus 6.1 percent in June 2009, should return positive next quarter.

Office assets are the biggest gainer for the quarter with total annualised returns increasing to 5.1 percent in Q2 from minus 0.9 percent in Q1, while the retail sector’s total returns increased to 6.5 percent from 2.9 percent.

During the first quarter, total returns for property in the country turned positive for the first time after one and a half years, joining other improving countries like the UK, South Korea and Germany.