Listed property returns likely to beat forecasts

The JSE's listed property sector which has been a sterling performer over the past few years has not managed to maintain its bullish momentum of the past few years of beating the broader all share index.

JSE's listed property sector has not managed to maintain its run of the past few years of beating the broader all share index.

The volatility of the listed property sector over the past two weeks can be largely explained by movements in bond yields and the rand, and given the market’s close correlation to bonds, analysts say it may remain volatile in the short term.

Property stocks continued their slide on Friday, taking the FTSE/JSE SAPY index’s losses to 15% from the peak reached two weeks ago.

Listed property prices have seen a rapid correction over the past two weeks, although analysts say this provides opportunities for both investors and companies themselves.

The recent sell-off in South Africa's FTSE-JSE Listed Property Index (SAPY) presents a good opportunity for investors with long-term income needs to buy property stocks, and current holders of these stock holders should not be fearful, said Evan Robins, head of fixed income at BoE Private Clients.