PE ratios and earnings growth forecast of REITs in New Zealand in 2024, by market

The price to earning (PE) ratios of REITs in New Zealand was lower than the PE ratio of the total market, but slightly higher than the real estate sector as of March 2024. REITs are companies that own or finance rental real estate. One of their major benefits is liquidity: Though not all REITs are publicly traded, many of the major ones are, which allows investors to easily buy and sell shares. Because REITs pay out most of their taxable income to shareholders as dividends, they typically do not pay any corporate income tax. As of March 2024, the PE ratio of REITs in New Zealand stood at 27.4, with the earnings of the market forecast to grow by 66.5 percent annually. The PE ratio is a valuation metric which is calculated as the ratio of the total market cap to the total earnings. A higher PE ratio means that the market cap has grown higher than the earnings - a sign of high investor confidence, but also that the market may be overpriced.