News Column

Investors bet on property boom despite warning

June 23, 2014

Phillip Inman

Global investors are betting on a substantial property boom despite warnings house prices in many countries are already overvalued.

According to a large study, sovereign wealth funds are seeking to boost returns by placing a larger proportion of their funds than last year in property, infrastructure projects and emerging markets.

More than half of respondents said they increased their property portfolios to benefit from a long-term rise in land and real estate values in developed and developing world markets.

The survey, by fund manager Invesco, found that while safer assets in the west remained the first choice of investors, the demand for bigger investment returns had accelerated investments in riskier assets.

Fifty-two funds worth more than $5.7tn (pounds 3.4tn) responded to the survey, which tracks the investment preferences of the world's largest government-backed investment groups. Norway's$878bn pension fund is the most valuable.

Among western nations, funds said Britain's political stability and welcoming attitude to foreign investment made it the first choice. Latin America, Africa and China were among the developing regions to benefit from sovereign wealth fund investments.

The findings come despite warnings from the IMF that the acceleration in global house prices from already high levels is now a threat to economic stability.

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Source: Guardian (UK)

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