INVESTING
Property and inflation: do they mix?
Many economic forecasters are flagging inflation as an adverse development of which investors must be wary. Chris Bedingfield refutes both the likelihood of rising prices and the belief such a scenario would disadvantage property holdings should it occur.
CHRIS BEDINGFIELD is principal and portfolio manager at Quay Global Investors.
20 selfmanagedsuper
There’s been a lot of talk lately in investment markets about inflation and whether it is likely to increase – and if it does, what this means for investors. This discussion is especially relevant for investors in property, in particular, listed real estate. Real estate investment trusts, or REITs, are generally seen as a yield investment, and many people believe a rising inflation environment is bad for yield and so they should sell out of such investments when inflation is increasing.
Therefore, for SMSFs with investments in listed real estate, there are two key questions to consider. If we do start to see inflation, is this a good time to liquidate listed property holdings? But also, are we really likely to see rising inflation over the short to medium term?
Inflation and real estate So, is high inflation a negative for real estate? If we do start to see a sustained increase in inflation,
