APAC Focus: Australian Real Estate Sector Update "When to buy residential REITs"

Research evidence excerpt

APAC Focus: Australian Real Estate Sector Update "When to buy residential REITs"

Global Research

22 June 2026ab

Australian Real Estate Sector Update Equities

AustralasiaAPAC Focus: When to buy residential REITsPlease

Real Estate

Solomon Zhang, CFA

Analyst

solomon.zhang@ubs.com

+61-2-9324 2007

Cody Shield, CFA

cody.shield@ubs.com

+61-2-9324 2903

Miriam Pritchard

miriam.pritchard@ubs.com

+61-2-9324 2270

Aman MadhyasthaResidentialREITs have sold off sharply on rising interest rates and declining housing

Associate Analyst

sentiment, with investors asking us whether it is now time to buy. While valuations aman.madhyastha@ubs.com

are looking optically cheap, we think it is too early to get bullish on the large cap resi +61-2-9324 2000

REITs as the critical macro factors we have identified (auction clearance rates and

Tommaso Aquilante house price expectations) have not signalled a bottom. Past housing downturns

Strategist

indicate that residential REITs do not recover until consecutive months of improving tommaso.aquilante@ubs.com

clearance rates and house price expectations are observed, which has typically +44-20-7567 1205

occurred ~60-70% of the way through a housing correction. UBS economists

expect a ~3-5% house price fall over the next 12 months, which implies the time to

start weighing up long positions for large cap resi could be in Q4 2026, not now.

We prefer buying the land lease operators (GLF/INA) in the interim.

Get long when auction clearance rates and house price expectations inflect

Residential REITs are down ~20% in the past 6m and have drastically underperformed

the A-REIT 200 (-4%) and the broader ASX200 (+4%), with the subsector facing the

triple headwind of: i) rising interest rates; ii) higher building costs post Middle East