Residential property remains the favoured investment by the wealthy
Despite warnings of a house price bubble the high net worth individuals will increase their property portfolios in the future.
Many of those individuals also said property values were overdone but they still believe the sector will continue to yield good returns into the future.
Those who took part in an NCB Stockbroker survey are a cross section of increasingly wealthy people who now number in their thousands following the Celtic Tiger boom.
The report, Asset Allocation and Management, was carried out by NCB Stockbrokers’ wealth management division.
It emerged also that property has in fact always been a strong feature in the portfolios of rich Irish investors.
Even through the glory days of the global stock markets, prior to the bubble, property was supported by the monied classes, the report said.
Not only that, but the rate of investment in the sector has stayed constant while the boom raged in the global stock markets.
Since then, the low interest rate environment, strong Irish growth, positive population trends and good tax breaks have been the main drivers of the property investment phenomenon.
The report found:
Property is the dominant asset class, accounting for 55% of respondents’ total gross assets when main residence is excluded
Low interest rates are a factor and borrowings account for 17% of assets
Residential emerges by some distance as the most popular vehicle
Ireland accounts for almost 80% of the property owned
Most say their current weighting in property is ‘about right’
Property is either fairly valued or overvalued and none felt it was under-valued
More than half said they were likely to get even heavier into the market in the future
Market performance was considered to be the key driver of respondents’ decision to invest in property
Quoted shares were the other key investment at 28%; cash 8%; government bonds 3%; and unquoted shares 8%.
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