Citi analyst Howard Penny anticipates contrasting forces impacting Australian property stocks in 2026. Potential interest rate hikes could pose a risk to valuations, while strong population growth and constrained supply are expected to bolster earnings fundamentals across various segments. Penny believes lower supply across several sub-sectors will foster a beneficial demand-supply equilibrium, supporting net property income growth and maintaining both global and domestic capital engagement.
Penny foresees a robust reporting season in February, suggesting that pullbacks prompted by rate volatility could present valuable opportunities for investors. Citi’s preferred large-cap stocks include Goodman Group, Stockland, Charter Hall, Ingenia Communities, Scentre Group, and GPT Group. Goodman Group, a global industrial property group, develops and manages logistics facilities and data centres. Scentre Group owns and operates Westfield shopping centres in Australia and New Zealand.
Among small and mid-cap companies, Abacus Storage King, Charter Hall Retail, and BWP Trust are favoured by the broker. On Friday, the real estate sector performed strongly. Goodman Group shares rose 0.7 per cent, Scentre Group increased by 1.3 per cent and Vicinity Centres saw a gain of 1.4 per cent.
