High net worth investor confidence in property is back.

1/12/2009

High net worth investor confidence in property is returning, with 76% of investors seeing opportunities in residential investment and 68% seeing opportunities in commercial investment, according to a report by Barclays Wealth.

Investors in nine of the 10 biggest markets are planning to increase their property allocation over the next two years, the survey found. Internationally, nine in 10 investors planned to hike their portfolio allocation by 1-4 percentage points. In Spain, where there is a glut of property, investors planned to pare back their allocation by 15 percentage points.

Twice as many investors – 35% of the 2,000 surveyed – plan to increase their property allocation rather than decrease it over the next two years.

The global report in conjunction with the Economist Intelligence Unit, Prospects for Property: On Solid Foundations, showed that investors believe that property has better long term prospects than other asset classes.

In the survey, 25% of investors also believed that recent price falls have made property seem cheap.

Respondents rated the US as the most popular nation for investment, with 16 per cent saying they expected to see the best returns there, followed by China and the UK, with 7 per cent expecting the best returns in each of those markets.

However, Lloyd Davies,CEO of Convey Law, comments,

“The fall in property values has shaken the most seasoned investors’ confidence. Despite this, these findings suggest that investors believe we are approaching the beginning of the end of the downturn. It appears that those surveyed are prepared to not only exploit undervalued opportunities, but also to commit further to property over the next two years in the belief that they will benefit from favourable returns. Given the past turmoil in other investment opportunities it is not surprising that investors are looking at bricks and mortar as a good sustainable investment that can provide solid returns.”

Extracts taken from Property week.com and Wealth Briefing