Returns on US forestry surged to their highest since the global economic crisis, and are poised for further gains, despite setbacks to hopes for housebuilding, a key destination for lumber. A timberland index compiled by National Council of Real Estate Investment Fiduciaries (Ncreif) showed a gain of 9.36% in the year to the end of June, the highest figure since autumn 2008, as the world was falling into slump.
The second quarter rise in US interest rates and the 9% drop in overall US housing starts triggered a slight downward adjustment in forecasts for housing demand for the remainder of 2013, the council said.
However, Ncreif notes that expectations are still on track for housing starts to climb north of 950,000 starts for 2013, a strong improvement after 2012's 780,000 starts. As the economy and housing markets continue to improve, the timber fund index should continue to see positive results.
The returns from timberland are well below those of 20.0% from farmland over the past year, but unlike agricultural property are on a rising annual trend, on Ncreif data.
The second quarter rise in US interest rates and the 9% drop in overall US housing starts triggered a slight downward adjustment in forecasts for housing demand for the remainder of 2013, the council said.
However, Ncreif notes that expectations are still on track for housing starts to climb north of 950,000 starts for 2013, a strong improvement after 2012's 780,000 starts. As the economy and housing markets continue to improve, the timber fund index should continue to see positive results.
The returns from timberland are well below those of 20.0% from farmland over the past year, but unlike agricultural property are on a rising annual trend, on Ncreif data.
Source by Commodity Insights
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