Investing in real estate stocks

Pros and cons of investing in residential, commercial and industrial real estate.

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There are three segments of the real estate sector and multiple ways to invest in real estate stocks, each with its own benefits and risks.

What are real estate stocks?

The real estate sector consists of stocks from companies that own, develop and manage properties. The Global Industry Classification Standard defines 11 stock sectors, each characterized by a specific industry or slice of the market.

The real estate sector can be further broken down into residential, commercial, and industrial real estate. Some real estate companies and trusts specialize in buying only one type of property while others manage multiple segments of the sector.

Ways to invest in real estate sector stocks

The real estate sector is dominated by real-estate investment trusts (REITs): companies that purchase and maintain income properties. REITs are publicly traded trusts that are bought and sold like stocks. They offer the opportunity to participate in real estate an Australian investor might otherwise not have access to, like shopping malls and business parks.

Those looking to explore the real estate sector can invest in REITs or real estate ETFs.

Invest in REITs

If you’d prefer to invest in individual real estate companies, REITs can be bought and sold through a brokerage account in Australia.

Most trading platforms come with research and analysis tools designed to help you compare and select investments across sectors. Stock screeners can help you narrow your options to investments available in the real estate sector, listing real estate companies and REITs alongside key metrics to help you assess your options.


  • Support individual companies. Investing in REITs gives you the opportunity to back individual companies and trusts based on your interests, values and investment goals.
  • Highly liquid. Unlike buying and selling physical property, you can swap REITs online in a matter of minutes.
  • Dividends. Like stocks, REITs pay dividends, which can act as a source of income.


  • Limited exposure. To compete with the broad selection of securities available through a single ETF, you’d have to purchase many individual stocks.
  • Volatile. REITs are easily influenced by interest rate fluctuations, making them inherently more volatile than ETFs.

Compare real estate stocks

Invest in real estate ETFs

An ETF — or exchange-traded fund — is a bundle of securities that track a specific stock sector or market index. Real estate ETFs track REITs and indexes for the real estate market. Instead of purchasing a single stock, ETFs offer access to a collection of stocks in a specific stock market sector, providing more comprehensive exposure.

Like stocks, ETFs can be bought and sold through a brokerage account. When you purchase an ETF, you pay an expense ratio: an annual cost expressed as a percentage of the funds invested and can range from 0.03% to 2.5%.

Popular ETFs in the real estate sector include:

  • Auckland Real Estate Trust (AKL)
  • Quay Global Real Estate Fund (QGI01)
  • Qualitas Real Estate Income Fund (QRI)
  • SPDR Dow Jones Global Select Real Estate Fund (DJRE)


  • Low risk. ETFs are less risky than stocks because they’re a collection — not a singular entity. The diversity of ETFs helps safeguard the fund from potential losses.
  • Portfolio diversification. Buying into an ETF broadens your portfolio with a single purchase.


  • Lower dividends. Dividends from an ETF may have trouble competing with high-yield stocks.
  • ETF fees. While it’s possible to swap stocks commission-free, ETFs carry expense ratios that are typically unavoidable.

How is the real estate sector performing?

The stock market is in constant flux, and individual stocks can change prices second by second. But you can use the performance of ETFs to gauge the average performance of a stock market sector over time. The graph below tracks the Real Estate Select Sector SPDR ETF (XLRE).

Why invest in real estate stocks?

Real estate stocks and ETFs typically offer dividends, which act as passive income. Better yet, real estate assets tend to be viewed as a stable investment, as they’re backed by physical property and often have long-term contracts or lease agreements, which can stabilize incoming cash flow.

Real estate investments can diversify your portfolio, while hedging against inflation. By investing in real estate stocks or funds, you own a piece of a tangible asset without purchasing and maintaining the property firsthand. It’s a practical option for Australians who want to diversify their portfolio with real estate but don’t want to own their own property.

What unique risks does the real estate sector face?

The profitability of the real estate market is closely correlated with occupancy rates and property values. If property values fall, so will share prices.

REITs also tend to be more volatile than physical properties, so while you benefit from having the property managed on your behalf, you also take on more risk.

Compare online brokers

If you want to buy stocks or ETFs in the real estate sector, you'll need to start by opening a brokerage account in Australia.

Name Product Standard brokerage fee Inactivity fee Markets International
eToro Share Trading (US stocks)
US$10 per month if there’s been no login for 12 months
US shares, ETFs
Zero brokerage share trading on US stocks with trades as low as $50.
Join the world’s biggest social trading network when you trade stocks, commodities and currencies from the one account.
Superhero share trading
ASX shares, ETFs
Pay zero brokerage on all Australian ETFs.
Trade ASX stocks with a flat $5 commission fee and a low minimum investment of just $100.
ThinkMarkets Share Trading
ASX shares, ETFs
Limited offer: Get 5 free ASX trades when you open a new account with ThinkMarkets before June 30, 2021 (T&Cs apply).
Buy and sell CHESS sponsored ASX shares with $0 brokerage on your first 5 trades. Only $8 flat fee brokerage thereafter, plus enjoy free live stock price data on an easy to use mobile app.
Bell Direct Share Trading
ASX shares, mFunds, ETFs
⭐ Finder Exclusive: Get 5 free stock trades and unlimited ETF trades until July 31, 2021 when you join Bell Direct.
Bell Direct offers a one-second placement guarantee on market-to-limit ASX orders or your trade is free, plus enjoy extensive free research reports from top financial experts.
IG Share Trading
Finder Award
IG Share Trading
$50 per quarter if you make fewer than three trades in that period
ASX shares, Global shares
$0 brokerage for US and global shares plus get an active trader discount of $5 commission on Australian shares.
Enjoy some of the lowest brokerage fees on the market when trading Australian shares, international shares, plus get access to 24-hour customer support.
Saxo Capital Markets (Classic account)
ASX shares, Global shares, Forex, CFDs, Margin trading, Options trading, ETFs
Acess 19,000+ stocks on 37 exchanges worldwide
Low fees for Australian and global share trading, no inactivity fees, low currency conversion fee and optimised for mobile.
CMC Markets Stockbroking
ASX shares, Global shares, mFunds, ETFs
$0 brokerage on global shares including US, UK and Japan markets.
Trade up to 9,000 products, including shares, ETFs and managed funds, plus access up to 15 major global and Australian stock exchanges.

Compare up to 4 providers

Important: Share trading can be financially risky and the value of your investment can go down as well as up. “Standard brokerage” fee is the cost to trade $1,000 or less of ASX-listed shares and ETFs without any qualifications or special eligibility. If ASX shares aren’t available, the fee shown is for US shares. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

Bottom line

The real estate sector offers the opportunity for stable dividends backed by physical assets but isn’t immune to risk. Australian investors should be wary of shifting property values and occupancy rates before they invest.

Research your trading platform options to find the brokerage account best suited to your needs.

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