The richer the individual, the higher the proportion of wealth invested in real estate.

Investments in commercial real estate are not uncommon for high net worth individuals. These individuals have been cautiously increasing their allocation to direct property investments owing to the low interest rate environment and scarcity of income-yielding assets with potential capital gain. For the majority of investors, though, real estate should be featured in a medium to long-term investment strategy, holding 20% to 30% of their capital in yield-bearing real estate assets.

Real estate is tangible, and it can be collateralised. This is, perhaps, its biggest selling point. There is also rental yield and the potential for capital gain - and in land-scarce Singapore, supply and demand forces often makes real estate investments a good investment over the long term.

Goh Teik Cheng,
Head of Research &
Product Advisory,
Personal Financial Services

Then again, it is not without its "minuses". The real estate market is generally inefficient, with little price transparency. It entails risks such as falling house prices, rising interest rates, adverse currency movements, tenancy problems and property damage. It is also illiquid, and there are high transaction costs such as stamp duties and taxes.