S’pore, HK property investors expect portfolio value to increase

Singapore investors are not alone in their love for property. Those in Hong Kong have also allocated 25 per cent of their portfolios to property, according to a survey of high net worth individuals conducted by Barclays Wealth.

In fact, both groups expect to allocate a greater part of their portfolios to property over the next two years by about 3 percentage points.

They cited potential yield and capital appreciation as the top two advantages of residential property investment.

Barclays Wealth said on Thursday that it expects investor demand for property to stay relatively strong with economic recovery and the loosening of liquidity. But it noted that diversification is essential to any investment portfolio.

Manpreet Gill, Asia strategist, Barclays Wealth, said: “At the end of the day, 25 per cent concentration for a Singaporean respondent is a fairly high part of the portfolio to invest in one asset class – one which, depending on the specific instance, could be potentially illiquid. That’s a higher number than what we would be recommending.

“At this point in time, we think it makes sense to invest in risky assets, which will include property, but also other asset classes like equities. We think diversification is a very important part of what clients and investors should be looking at today. That’s one of the important findings of our survey.”

Barclays also noted that property as an asset class has typically not delivered high long-term returns.

In Singapore, Barclays expects upward price movements in the mid- to higher-end segments of the market, where property prices have taken a hit because of the global credit crunch.

The survey was conducted in August and September, polling over 2,000 respondents from across the world, including the US, UK, Spain and India.

Source : Channel NewsAsia – 3 Dec 2009

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