Private investors continued in December to doubt stocks could rise in 2003 but believe property values could go on rising despite analystsÃÂ´ warnings that real estate gains can not last, a survey has shown.
A monthly survey of 500 investors by JP Morgan Fleming showed 60 percent of them think property in their region would be worth more in six monthsÃÂ´ time, while only 23 percent thought equities would rally over the same period.
The findings come at a time when investor sentiment towards stocks has been hit by the worst equity bear market in a decade and fears about a possible war with Iraq.
Investor preference for property instead of stocks could prove unwise because property values have already risen sharply in recent months, said Peter Brewster, head of market research at JP Morgan Fleming.
'Property values are already very high and some commentators are voicing concerns over the stretched nature of the property market,' Brewster said.
The survey, carried out between December 6 and 17, showed that 39 percent of those polled thought stocks would fall in six monthsÃÂ´ time, while only 13 percent thought property values would drop over this period.
Last monthÃÂ´s poll was the first in which investors were asked by JP Morgan for their views about the property market as an asset class.
'Expectations for property are clearly being raised by the record-breaking price rises seen over the last five years, while unemployment and low interest rates are supporting confidence,' Brewster said.
Data by fund tracker Lipper for 2002 published last Friday showed that while average returns for British-based mutual funds fell 15.25 percent over the year, property funds were among the few asset categories to post a gain, up 4.58 percent.
(source: JP Morgan Fleming)