The real estate sector has faced challenges in recent years, and ASX REITs have felt the brunt. The combination of high interest rates and stubborn inflation has had ripple effects throughout the industry.
But fortunes may be changing as we look forward. Two ASX REITs stand out as top buys for investors, according to major brokers. Are they suited for your portfolio? Let's dive in.
ASX REITs ready to rise?
After a turbulent few years, the Australian real estate sector might be positioned for growth in 2025.
According to accounting firm KPMG's 2025 Residential Property Market Outlook, unit prices are expected to "rise faster than houses over the next two years". Per the report:
National house price growth is expected to be modest in 2025, recording increases at a slightly lower level than in KPMG forecasts national house prices to rise by 3.3% in 2025 and 6.0% in 2026. House price growth will be more pronounced in the second half of 2025, which aligns with the anticipated series of rate cuts.
Meanwhile, it is supply and demand mechanics underlining the growth sentiment, KPMG says. This also comes as population growth remains at the high end compared to history.
Combined, these factors are "supporting" growth in major areas.
While affordability issues are keeping buyers away and the beginning of the rate-cutting cycle has been delayed, there are still several factors supporting price growth. Dwelling supply continues to be limited throughout the forecasting period, which is a significant factor in sustaining price levels.
Brokers keen on the sector
Despite this view, ASX REIT Goodman Group (ASX: GMG)'s share price has sunk more than 7% this past month.
The drop followed the wider sell-off in global markets and a capital raise of around $4.4 billion, which led to some equity dilution.
Despite this, Bell Potter sees the price weakness as an attractive opportunity for long-term investors.
As my colleague James reported, Bell reckons Goodman is "well-leveraged to data centres", which are a burgeoning industry in Australia and worldwide.
As we also reported this week, Wilsons has a buy rating on the ASX REIT as well, following the dip in share price.
Meanwhile, Stockland Corporation Ltd (ASX: SGP) is rated a buy from the consensus of analyst estimates, according to CommSec.
Morgan Stanley is one on the bullish side, and reckons the stock is well positioned for growth this year. It projects dividends of 25.4 cents per share in 2025, getting you around 5% yield at the time of writing.
It rates the ASX REIT a buy with a price target of $6.35 apiece.
Stockland was last at $4.96 apiece.
Foolish takeaway
These two ASX REITs have been rated as top buys from major brokers as the outlook for Aussie real estate looks up.
Zooming out, Goodman is up 2% over the past year, whilst Stockland holds onto a 3.5% gain.
