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Where in the World for Property Investment? POLL

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Where in the World for Property Investment? POLL

By - Thursday 30 September 2010

Last month we ran a poll asking if you were liquid, what property investment type would you invest into at the moment?

The results themselves seem to show that investors are really looking towards property now as an income generation tool, rather than just hard asset acquisition. For example, wind the clock back 5 years, and Off Plan Property would likely have been far higher up the list, go back further, (say 10 years) and it's quite likely that student accommodation and managed property funds would not have appeared at all. Further still (say 25 years or more) and industrial property would quite possibly have been in the top 5 of the same survey.

Investment Type Percentage

Buy to Let

21.88%

Hotel Rooms

17.19%

Re-sale Property

12.50%

Student Accommodation

12.50%

Commercial Property

10.94%

Off Plan Property 7.81%
Developer Stocks and Shares 6.25%
A Managed Property Fund 6.25%
REITS (Real Estate Investment Trusts) 3.13%
I would Not Invest in Property 1.56%

Industrial Property

0.00%

 

It suggests that the retail investor attitude to the property sector is changing, initially due to the fact that it has been able to, but further more because it has needed to as time has passed, and as more investment vehicles have become available.

We have shown in prior articles (The Evolution of Investments, and UK Property Investment Through the Decades) that not only is much of this down to what is marketed, but the success or failure of property investment also depends on retail investor demand. Off Plan Property has waned significantly over the past few years, not just because of the lack of new projects or availability of funding, but largely also due to demand because of the failure of the investment exit strategies promoted with it. (Buy 3, sell 2 at completion to pay for the remainder). Industrial property investment has faded (in the UK anyway) due to the lack of necessity - the UK doesn’t manufacture much for export anymore, so there is no need for new development in the industrial sector.

Hotel and student accommodation are a different kettle of fish. The student sector is being positively promoted by the press at present as the new Buy to Let, primarily due to the sector having a fairly captive market, with a known budget to it (i.e. students will know in advance how much they have to spend on their accommodation for the year). Hotels in major cities around the world have weathered the recession pretty well by all accounts, and those cities constantly hosting high-quality events year round, or those involved with high-profile world sporting events are proving to be very popular.

The property company stocks and shares sector I believe is an area that will always be relatively quiet in comparison to the hard asset or managed investment side of the business. The simple reasons being that there is just too much cross-over in investment style, and it really is difficult to second guess what will happen to a share price based on companies that make their money in "chunks" as they complete projects, rather than steady, constant, measurable performance. 

We will undoubtedly run the same poll again in a few months time to compare the change in sentiment.

This month's poll.

October's poll is about location. The news is filled with what is happening to the property markets all over the world, some set for more bubble bursting, others to drop further still, and some to just carry on their merry way.

So, If you had 100,000 GBP (117K EUR or 158K USD) to invest in property right now, which continent would you invest it in to?

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*This page is provided for information purposes only and should not be construed as offering advice. IPIN is not licensed to give financial advice and all information provided by IPIN regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.


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