Speaking at an Association of Superannuation Funds of Australia (ASFA) event yesterday, AMP chief economist Dr Shane Oliver estimated the return potential for LPTs over the next five to 10 years is around 13-14 per cent, compared to an average long-term return for the sector of around 10 per cent.
Oliver said the recent slump in shares and listed property had boosted the medium-term return potential of the asset class. He said because prices had fallen so far, this had led to an increase in their return potential.
“They’re certainly worth looking at as an investment,” Oliver said.
However, he said the short-term outlook (one to two years) is “anyone’s guess” and the market could easily see more downside over the next month or two.
Oliver said of the property asset classes, the least attractive is now residential housing, as a result of rising unemployment.
