Property is the collective term for undeveloped and developed land - also called real estate - that forms one of the four major investment asset classes along with equities, debt and cash. Although considered a haven for conservative investors, property in many parts of the world has recently suffered from inflated valuations that have since collapsed disastrously in some markets.
Investments in most property are generally considered safe long-term investments because the market in general - like the stock market - tends to rise in value over time, plus rental property investments carry the added value of a predictable revenue stream. Developed real estate, however, carries the disadvantage of being immobile and thus its performance is very closely linked to that of the surrounding economy. Since most property markets are less liquid than other asset classes, collective investment vehicles like listed real estate investment trusts (REITs) that operate like property mutual funds have recently become popular.
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- Real Estate Investment Trusts – Fund Managers Eye a New Asset Class. Ernst & Young.