Volume 10:
Investor Perceptions of Property

Articles in Volume 10

• Executive Summary

  Our survey shows medium-term confidence in property investments is growing, although tight credit conditions continue to be a problem. We also find that emotional factors play a greater role in property investment decisions than in other asset classes.

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• Trying times for property investors

  While prices start to stabilise in some residential property markets, notably China, it's clear that the global picture for commercial property and real estate investment trusts is more mixed.

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• Who’s investing in property?

  Despite uncertainty in the market, high net worth investors still regard property as an important part of their portfolio. There is plenty of variation across geographies but, in general, the wealthier the individual, the more they invest in property.

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• Upping the ante?

  As individuals consider whether it's time to change their allocation to property, we see investors in nine out of ten countries anticipating a small increase, while in Spain they are running fast in the opposite direction.

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• Investing with a home bias

  While property investors tend to concentrate on their home market, there are some interesting themes in overseas investment. Among traditional markets, the US and UK remain strong, while China and India are both showing real promise.

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• Opportunities abound but credit is still crunched

  There seem to be investment opportunities in both residential and (to a lesser extent) commercial property, but the lack of available credit is a problem. While property investors are broadly optimistic, competition for the best buildings has increased recently.

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• Assessing the asset class: Residential

  We look at residential property options that investors sometimes overlook. In particular, we examine how an emotional relationship with property can cloud investors' judgment, both in terms of which property to choose and when to sell.

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• Assessing the asset class: Commercial

  There is some optimism among the private investors who can get involved in the commercial property market. However, significant problems with direct investments may make indirect options, such as mutual funds and real estate investment trusts, more attractive.

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• Conclusion: Time to put reason before emotion

  There is potential in global property markets but selectivity is vital. Investors should look long term, avoid emotion and embrace diversity to avoid over-exposure to an asset class that is susceptible to booms and busts.

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• The Barclays Wealth view

  Michael Dicks, Chief Economist at Barclays Wealth, reacts to the survey. He explains that many respondents are relying on property more than we would normally advise. He also challenges the common belief that property is a 'safe' investment.

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• Appendix: Defying the downturn

  There can be few areas of the world that show so clearly the dangers of over-development than the skyline of Dubai, which once had the highest concentration of construction cranes in the world. Today, the cranes are idle, the market has stalled and there is a new mood of sobriety.

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• Appendix: Managing uncertainty in the US

  Although the US was chosen by more survey respondents than any other country as the market (other than their own) where ROI is expected to perform most strongly over the next two years, some experts are less convinced that property prices are stabilising.

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• Appendix: The importance of local knowledge

  Synergy Asset Management is a Geneva-based family office that manages money for several high net worth families in the Middle East and Europe. In 2008, Synergy set up the Landmark Real Estate Fund to provide steady returns in Switzerland and other parts of Europe.

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