Pre-retirees turning to property investment

AUI head of portfolio management Ryan Banting suggested property, both direct and indirect, is competing with more traditional investments in this age group. 

“Whether you're a growth investor, you're balanced or you're one of the thousands of newly minted baby boomer retirees that are looking for income to replace what has traditionally been a term deposit, we think property represents a very attractive investment at the moment,” he said.

He suggested property had a number of appealing characteristics as an asset class, including its relative stability.

“We've seen property quite resilient over economic cycles from an income perspective, much more so than what we see for many other asset classes.

“What we see is that the volatility which is inherent in an investor's portfolio is dramatically reduced by owning real estate investments, either through an unlisted fund or directly,” he said.

Moreover, Mr Banting suggested investors appreciated the physical nature of property, as opposed to intangible investments like equities.

“The fact that it's a real, tangible asset that generally provides an inflation hedge is something that is attracting a large number of those pre-retirees and transition to retirement clients,” he said.

He also suggested some investors in this age group were looking for an investment that acted independently of the share market.

“It's that diversification, that very low correlation with equity market risk,” he said.