Time to reconsider real estate investing? (By IFN)

2012 could be a good time to reconsider investing in property as prices have moved lower, according to the Bank of London and The Middle East (BLME).
“Across the world, various property markets have seen downward revaluation to a varying extent, for example the US, the UK, Europe and the UAE. There is anecdotal evidence, too, that other firms are seeing niche opportunities in the UK real estate sector with the launch of funds specializing in student accommodation and nursing homes,” it said.

It added that property investment supports taking a long-term view, ideal for strategic asset allocation.

The bank also sees investors taking a safe-haven approach to placing funds; given the emergence of a bear market, especially in the equities market. As such, investors have also looked at gold as an optimal value asset class; although the recent gold run suggests that it is beginning to be overvalued.

“One might conclude that it is now time to invest in equities on that basis, but the current build-up of cash on many corporate balance sheets would indicate there are few profitable investment projects which can be identified at present. If anything, emerging market equities offer superior long-term growth prospects, but bring with them a fairly high level of expected risk, too,” it said.

It also noted that the US dollar Sukuk market finished in positive territory in the fourth quarter of last year, although displaying some volatility. In spite of this, the Islamic bond market showed lower volatility than in the conventional market, it said.