AUSTRALIA direct real estate investment returns rose to 18.1 percent in the year to March 31, outperforming bonds and stocks, as the country's 17-year economic boom pushed up office values, according to an index of properties.

Returns on office buildings surged to 22.7 percent, beating the five-year average of 13.5 percent, according to a statement by IPD, which prepares the index tracking almost A$93 billion (US$91 billion), and the Property Council of Australia. The return the previous year on Australian direct property investment was 17 percent, Bloomberg News said.

Vacancies in Australian malls and office towers are dropping, pushing up rents, as Chinese demand for the country's iron ore and coal boosts growth. Direct property investment returns advanced at the same time that the S&P/ASX 200 Property Trust Index dropped 27 percent and the S&P/ASX 200 Index of Australia's biggest companies fell 9.5 percent. The CBA Bond index earned 4.2 percent in the period.