• Home
•  » Property Investment News

Property Investment Stays Top

Property investment remains a clear favourite among the wealthy. Not only does property make up a significant proportion of their portfolios, property is also tipped as a good investment opportunity this year.

Within the different kinds of property assets, residential and commercial property investments are portfolio leaders. This year, residential property is expected to be "the star performer" with commercial property in second place. And all this at a time when property markets in many countries are still finding their way out of the tunnel.

These perhaps surprising findings are part of the recently released Knight Frank Wealth Report 2010 Attitudes Survey. The survey asked high net worth individuals (HNWIs - those whose wealth runs to over US$1 million) about their portfolios and their predictions for the year to come. The conclusion to the findings is that "HNWIs are starting to feel more confident about the future", indicating that perhaps the tide for property generally is now turning.

One of the biggest advantages offered by investment in property is that you add a tangible asset to your portfolio, an aspect favoured by most investors as well as HNWIs. The vast majority (92%) of those who participated in the survey have major stakes in property in their portfolios - bricks and mortar make up around one-third of all assets. This is even higher when it comes to European HNWIs with up to 50% of their portfolios dedicated to property.

Residential and commercial property investments are runaway favourites (their combined share in portfolios averages 90%) with investment in agricultural land and forests accounting for just 5%. Asian HNWIs are the keenest advocates of residential property investment while North Americans favour commercial.

When asked for their investment tips for this year, 70% of HNWIs go for property, followed closely by equities. Bonds and gold are not favoured in 2010. As far as best-performing assets go, 31% of HNWIs predict equities will take top position with 21% favouring property. Within property, most expect residential property to achieve the best returns.

Perhaps reflecting the expectation of property to do well this year, many HNWIs have plans to buy in 2010. 37% said they were looking to make investment in a property for use as a second or holiday home with 13% planning to buy a new home. With views and climate at the top of the list for requirements for holiday homes, beachfront properties in hot spots such as the Caribbean, Spain, Florida and Brazil seem likely choices for investment destinations.

The majority of HNWIs participating in the survey believe their wealth will increase this year, although few expect their net worth to grow significantly. HNWIs are therefore cautious but optimistic. The survey concludes that "property is considered a very desirable asset to own and invest in".

At Obelisk, we are also tipping property and property-related investments as top performers for this year. As always, the best performances will only come from rigorously selected and researched products. We believe Brazil is one of the few destinations in the world currently offering these and we would include Brazil real estate and related investments as a must in any portfolio for 2010 and beyond.

 

« Back

Other Property Investment News