(SYDNEY) Total annualised returns for Australian property rose nearly six-fold in the second quarter from three months earlier, but future rises will likely be moderate, property research firm IPD said yesterday.

Total returns for all property types including income and capital, jumped to 5.9 per cent in the year to June from one per cent in the year to March, IPD said.

‘It came from a pull back in negative capital growth,’ said Anthony De Francesco, IPD managing director for Australia and New Zealand. ‘We will continue to see upswings but the pace will be moderate, in line with the general softening in the economy.’ He added that annualised capital returns, which hit minus 6.1 per cent in June last year, should return positive in the next quarter.

Office assets saw the biggest improvement with their total annualised returns rising to 5.1 per cent in June from minus 0.9 per cent in March. In the retail sector, total returns rose to 6.5 per cent from 2.9 per cent.

In March, total returns for Australian property turned positive for the first time in a year and a half, joining other outperforming countries such as the UK, Germany and South Korea.

The PCA/IPD index tracks the performance of 1,352 property investments, with a total capital value of US$101 billion. — Reuters

Source: Business Times, 26 Aug 2010