The Reverse Yield Gap
Traditionally, initial property (investment) yields were higher than the rate of return on government stock (i.e. debt instruments). Initial property yields were in the region of 2% to 3% higher. This positive difference was termed the yield gap. This yield gap is to be expected. First, the risks of investing in property were (and still are) higher than those associated with investing in government stock (usually regarded as riskless). Second, the property market was (and still is) subject to imperfections (see Unit 1). For these two reasons, investors require a higher yield from investing in property compared to investing in government stock. However, the level of inflation can upset this relationship (i.e. the yield gap).
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Trying to do a design project and about to make recommendations, need to know what the yield is on government stock at the moment, have been looking on google for half an hour now with no luck
Would anyone be so kind to have a look or already know?
Thanks,
Traditionally, initial property (investment) yields were higher than the rate of return on government stock (i.e. debt instruments). Initial property yields were in the region of 2% to 3% higher. This positive difference was termed the yield gap. This yield gap is to be expected. First, the risks of investing in property were (and still are) higher than those associated with investing in government stock (usually regarded as riskless). Second, the property market was (and still is) subject to imperfections (see Unit 1). For these two reasons, investors require a higher yield from investing in property compared to investing in government stock. However, the level of inflation can upset this relationship (i.e. the yield gap).
###
Trying to do a design project and about to make recommendations, need to know what the yield is on government stock at the moment, have been looking on google for half an hour now with no luck
Would anyone be so kind to have a look or already know?
Thanks,
