We buy direct property for our clients so it was pleasing to see The Australian newspaper report this week that direct property has outperformed Australian shares as an asset class over the past decade, according to a report from Atchison Consultants prepared for the Property Funds Association.

We believe there is nothing like having your name on a house title, rather than some form of indirect holding

ASX-listed property trusts performed significantly worse over the same period, after entering the global financial crisis with high levels of debt and being forced to raise equity at deep discounts while facing shareholder sell-offs.

The research comes as government bond rates have started to tick up from low levels, with the rise of the 10-year US Treasury yield above 3.1 per cent this month sparking some selling in A-REITs.

Rising interest rates make bond proxy stocks such as REITs less attractive in the short term and could also weigh on the performance of direct property going forward, as yield-hungry investors consider their options.

Direct property recorded a total return of 7.6 per cent a year over the 10 years to December 2017,

By contrast, Australian shares had a total return of 4 per cent a year over the decade since the GFC, while A-REITs managed just 1.8 per cent.

“What’s driven it in part has been the decline in long-term interest rates over that long period,” Atchison Consultants managing director Ken Atchison.