‘Keep an eye on commercial property’, investors advised

“Industrial property ratings in both cities were upgraded to ‘strong and improving’ last month by Thinktank, matching the office sector ratings there, making these four market sectors the investment standouts,” Mr Amundsen said.

“By contrast, Perth still has four out of five property sectors – residential housing and units, office and industrial – rated as ‘weak’, while for Adelaide, retail and industrial are rated ‘weak’.

“However, Adelaide’s office and residential markets are ‘improving’. Brisbane’s markets are all rated ‘fair’, with office and industrial offering some upside with an ‘improving’ tag.”

In addition, Mr Amundsen advised investors to “tread warily”, with the MSCI All Property Index for the year to 30 June 2019 down to 8.3 per cent compared with 11.6 per cent last year and 10.3 per cent six months ago. This represents the lowest level since September 2010.

“But for investors, and especially SMSF trustees wanting income, the outlook is more optimistic,” he added.

“Although income returns hit 5.4 per cent at 30 June 2019, they have traded in a fairly narrow band since peaking at 7.5 per cent in June 2010.

“Capital returns have been far more volatile over this period, peaking at 6.8 per cent in March 2016 and then falling gradually to 3.4 per cent in June 2019 [excluding the negative returns of June 2009 to June 2010].”