Current Investor Sentiment towards Property Stocks v's Property

S

somerset

Guest
The following article:
http://www.bloomberg.com/apps/news?pid=20601109&sid=aplRXmosXJJw&refer=home

highlights the fact that....

" Rising interest rates and declining profits from real estate are pushing investors to ditch European property stocks after a four-year rally. Rising interest rates and declining profits from real estate are pushing investors to ditch European property stocks after a four-year rally"

Why is there a disconnect between stagnating stocks and a continuing growth in property values as an asset class and an investment vehicle???, (excluding Ireland of course.... which should not be mentioned ....please)

....are these shares not just a reflection of current property value?
 
I don't think that these shares are a reflection of the value of the output these companies create (i.e. property assets). The shares only reflect their ability to profit off them. The market is reacting to the fact that these companies may have reduced profits going forward.

I think it's well recognized that house prices are sticky though so they may not be priced accurately for the current climate. It took 2 years after the Tokyo stock exchange crashed for it to have much of an effect on the property market over there.
 
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