Here’s a snapshot of small cap real estate stocks as spring auctions gets underway
Link copied to
After a long winter the colours are starting to come back to the trees and that means it’s time for the real estate spring selling season.
Spring is the time that the housing market bounces back after a traditional winter lull, presenting opportunities for both buyers and sellers.
The property market showed “a degree of resilience as a surge of properties flooded in” for the first “Super Saturday” auction day at the weekened, reported the AFR. The clearance rate rose from 52 per cent to 56 per cent over the weekend reported real estate analyst CoreLogic — despite most people focusing on the footy finals.
More properties are hitting the market and an increased number of buyers are out looking for bargains given lower property prices in recent months.
That could mean it’s a good time to revisit ASX-listed real estate stocks.
Stoclkhead tracks about 45 ASX-listed real estate stocks (not including real estate investment trusts or REITs).
As you’d expect, small cap real estate stocks are down about 15 per cent on average year-on-year, according to our table. The larger caps — including the likes of REA Group and Domain — have insulated the sector somewhat with small gains.
Investor interest in small cap property stocks has improved over the past six months — with stocks down an average of 7 per cent over that time.
Real estate developers
There are more than 30 real estate developers focused on housing Australia’s growing population.
Homebuilder Simonds Group (ASX:SIO) has risen 41 per cent in the last six months, including a 30pc rise back in June when it told investors that it was building more homes and earning more money than year prior.
Desane Group (ASX:DGH) made waves this month when it announced the sale of one of its top Sydney properties to the Roads and Maritime Service.
That ended a year-long to-and-fro. The RMS originally offered $18.4 million, market value, for the property.
But Desane wanted $100 million in compensation and took it to the Supreme Court. Its chairman Professor John Sheehan told Stockhead at the time that they’d happened to pick a fight with a property rights expert.
The matter was finally been resolved, with the RMS paying $78 million for the property. Prof Sheehan told investors he considered the matter finalised. Desane shareholders liked the resultsm sending the company up 28 per cent in the past six months.
Kingsland Global (ASX:KLO) has rised 94 per cent in the past six months.
Agents and real estate services
Besides developers, the ASX offers marketing platforms, traditional real estate agencies and newer, tech-ier disruptors.
In the largeer space, the recently floated Domain is hoping to emulate the spectacular rise of REA Group in the poast five years.
Most of the smaller real estate stocks are down in recent times.
For example, agency McGrath (ASX:MEA) posted a $63 million loss while fellow agency Agency Group (ASX:AU1) is down 37 per cent in the past six months.
Rent.com.au (ASX:RNT) is one of the small fish fighting well against the bigger dogs; its model is geared entirely toward renters, which make up about 30 per cent of dwellings in Australia but has traditionally been overlooked.
Their platform allows renters to make an online ‘renter resume’, meaning they can submit a detailed CV as a renter, even including a pet resume, without having to go back-and-forth with hard copies with the agency.
The company is down slightly, 5pc in the past six months. It cut its losses by nearly $6 million, however.
Here’s a table of real estate stocks with share price performance over the past year:
Swipe or scroll to reveal table. Click headings to sort: