Investment property has long been one of Australia’s favourite ways to generate wealth and income. 

However a new report from Global X has shed light on how a changing market is causing many investors to reassess that strategy.

Key market changes 

Rising interest rates, falling home prices and the Federal Government’s changes to negative gearing and capital gains tax (CGT) concessions are reshaping the economics of property investing. 

According to Global X, investors are increasingly turning to alternative sources of income, particularly exchange-traded funds (ETFs). 

ETFs offer access to dividends, bond yields and infrastructure income without the costs and complexity of owning property.

The shift is already showing up in the data.

The latest ABS Lending Indicators report revealed that investor housing activity weakened significantly in the June quarter. The number of new investor loan commitments fell 8.6%, while the value of investor loans declined 10.2% to $37.1 billion. That was by far the largest fall among major borrower groups and marked the sharpest quarterly decline in investor lending since 2022.

While property investors are pulling back, money is flowing strongly into income-focused investment products.

Property is becoming less attractive 

Global X highlighted that residential property has traditionally rested on two pillars: rental income and capital growth. Today, both are facing headwinds.

Borrowing costs remain elevated, reducing the cash flow generated by investment properties. Meanwhile, Australia’s housing market is beginning to lose momentum. Cotality’s national Home Value Index fell 0.7% in July, the largest monthly decline since December 2022. Major banks are reporting that mortgage applications have also fallen by as much as 20% since Budget night, highlighting weaker investor appetite.

Additionally, The Federal Government’s changes to negative gearing and CGT have added another layer of pressure. 

While investors once relied on generous tax benefits to enhance after-tax returns, the reduction of these incentives means many are now taking a closer look at whether property still delivers the income and return profile they need.

These factors are pushing income investors towards a different asset class. 

Income ASX ETFs

According to Global X’s latest ETF Market Scoop, Australian investors allocated a record $6.8 billion into ETFs in July alone, making it the strongest month on record for the industry. 

The report also revealed which type of ASX ETFs investors found most appealing.

Income-focused ETFs attracted a record $1.8 billion, including a record $1.4 billion into bond ETFs.

This surge suggests investors are actively seeking income opportunities outside traditional property investments.

Unlike residential property, income ETFs can provide diversified exposure to dozens or even hundreds of underlying securities through a single investment. Depending on the strategy, investors can access income from government bonds, corporate bonds, listed infrastructure, dividend-paying companies or a combination of these assets.

For investors accustomed to relying on rental income, these products offer an alternative source of regular cash flow without tenant management, maintenance costs, land tax or the need to take on large amounts of debt.

Investors seeking income-oriented ASX ETFs have several options to consider: 

• Global X S&P/ASX 200 High Dividend ETF (ASX: ZYAU)
• Betashares Australian Dividend Harvester Fund (ASX: HVST)
• Betashares S&P Australian Shares High Yield ETF (ASX: HYLD). 

The post The property market is cooling: Here’s how income investors are adapting appeared first on The Motley Fool Australia.

More reading

• Expert names 2 top ASX ETFs to buy today
• This ASX income ETF yields 4.3% and pays monthly dividends
• 3 of the best dividend ASX ETFs right now for passive income
• Why I’d buy these 2 ASX ETFs for $10,000 a year in passive income
• $10,000 invested in these dividend ETFs will bring how much passive income?

Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX ETFs, or exchange traded funds, provide a handy one-stop-shop for Aussie investors seeking to gain exposure to a basket of stocks with a single investment.

Rather than having to research and buy multiple stocks, you can get that diversity, and more, from an ETF.

Below we look at two ETFs that DP Wealth Advisory’s Andrew Wielandt recently issued buy recommendations for (courtesy of The Bull).

ASX ETF offers international stock exposure

The first ASX ETF Wielandt has a bullish outlook on is Betashares Global Royalties ETF (ASX: ROYL).

“ROYL is a diverse exchange traded fund operating across a number of countries, including the United States, Canada, Brazil and Denmark,” he said.

“It holds about 40 companies, with investments including ARM Holdings PLC, Texas Pacific Land Corporation and Wheaton Precious Metals at August 11, 2026,” he added.

Summarising his buy recommendation on ROYL, Wielandt concluded:

ROYL focuses on companies earning royalty and intellectual property income. What appeals is relatively steady returns compared to other cyclical investments. The company posted a return of 15.59% after fees in the past 12 months to July 31, 2026.

Which brings us to…

Exchange traded fund with an ESG bent

The second ASX ETF Wielandt recommends buying will hold particular appeal to investors who place a high value on companies’ environmental, social, and governance (ESG) standards.

The fund in question is the Munro Climate Change Leaders Fund Active ETF (ASX: MCCL), which Wielandt noted that he holds in is own self-managed super fund.

“This exchange traded fund holds a concentrated portfolio of companies aiming to benefit from decarbonisation during the next decade,” he said.

According to Wielandt:

The ETF holds between 15 and 25 positions involved in clean energy, clean transport and energy efficiency. The fund posted a return of 16.9% for the 12 months to July 31, 2026. However, given its highly concentrated nature, it’s important to note that returns can be volatile.

In our view, MCCL can also be considered an investment in the future and can be part of a balanced portfolio.

A bonus passive income ETF

If it’s passive income you’re targeting, then you might want to look into the BetaShares Australian Dividend Harvester Fund (ASX: HVST).

This ASX ETF gives investors instant exposure 40 to 60 high-yielding, blue-chip ASX shares.

And HVST pays out dividends every month, so your next income payout is never too far away.

As at 31 July the HVST had 12-month trailing yield of 5.6%, 63% franked. Taking those franking credits into account, the grossed-up yield comes out to 7.1%.

The post Expert names 2 top ASX ETFs to buy today appeared first on The Motley Fool Australia.

More reading

• 2 ASX ETFs to buy as the market gathers strength: expert
• 3 of the best dividend ASX ETFs right now for passive income
• Why I’d buy these 2 ASX ETFs for $10,000 a year in passive income
• $10,000 invested in these dividend ETFs will bring how much passive income?
• How much is needed in superannuation to target a $6,000 monthly passive income?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Although the S&P/ASX 200 Index (ASX: XJO) is still pretty close to its August all-time highs, there are still a few well-known blue-chip shares that are offering dividend yields above 4% today. But despite popular dividend shares like Telstra Group Ltd (ASX: TLS), Westpac Banking Corp (ASX: WBC), and Fortescue Ltd (ASX: FMG) offering yields over 4%, they still only pay out two dividends a year.

That might be fine for some investors. But others would very much prefer a more regular payment schedule. After all, our bills and living expenses don’t get invoiced to us every six months. So why not invest in a dividend-paying stock that accommodates more frequent paycheques?

Investors who agree with that sentiment might wish to check out a certain income-focused exchange-traded fund (ETF).

That ETF is none other than the BetaShares S&P Australian Shares High Yield ETF (ASX: HYLD).

How does this ASX income ETF work?

Like most ASX ETFs, HYLD holds a portfolio of underlying investments, which it manages on behalf of its investors. In this case, that portfolio consists of dozens of proven dividend stocks from the ASX. These range from the usual suspects like BHP Group Ltd (ASX: BHP), National Australia Bank Ltd (ASX: NAB), and Telstra, to others like Coles Group Ltd (ASX: COL), Suncorp Group Ltd (ASX: SUN), and Ampol Ltd (ASX: ALD).

You might also recognise Medibank Private Ltd (ASX: MPL), Metcash Ltd (ASX: MTS), and APA Group (ASX: APA).

This income ETF is able to extract and pass on the dividends it receives from these holdings, alongside profits from rebalancing its portfolio, to its own investors as dividend distributions. This it does 12 times a year.

Yes, HYLD is a monthly dividend payer. Additionally, its dividends tend to come not fully franked, but partially franked to a high level. To illustrate, this ETF’s most recent payout, which arrived on 18 August, was franked at 77.84%.

But let’s get to some numbers. HYLD has just passed its twelfth dividend payment (the one we just discussed). That means we can give it a proper trailing yield for the first time. So over the past 12 months, this ASX income ETF has doled out a total of $1.4275 in dividends per unit. At the current (at the time of writing) unit price of $33.50, that 12-month dividend total gives this ASX income ETF a trailing yield of 4.26%.

Given that yield, as well as this ASX income ETF’s monthly payout schedule, this investment might well be worth a look today if dividends are a priority of your ASX investing portfolio.

The post This ASX income ETF yields 4.3% and pays monthly dividends appeared first on The Motley Fool Australia.

More reading

• 3 of the best dividend ASX ETFs right now for passive income
• Why these 2 ASX ETFs could be the best dividend funds for retirees
• How much passive income could I earn from a $600,000 superannuation balance?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Apa Group and Telstra Group. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.