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ASIA: Buy Property Stocks, Not Physical Real Estate

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  • ASIA: Buy Property Stocks, Not Physical Real Estate

    Posted By: CNBC.com

    Property prices have suffered dramatic losses across the globe as the financial crisis deepened and growth ground to a halt in many countries.

    With this downtrend set to continue in 2009, a viewer email asking whether it is time to be investing in real estate, was posed to an investment expert on CNBC Asia Pacific's "Protect Your Wealth".

    "You are much better off buying property stocks rather than physical property at this juncture," answered Terence Khoo, Asian fund manager at Sofaer Capital.

    "Equity markets are generally at a huge discount to physical markets," Khoo said, adding that depending on where you are, you could see huge discounts of between 50%-70%.

    Khoo also said that he was keeping close tabs on China as more companies were thought to be going bust in the past, and as a result, were trading at 80%-90% discounts. Even though they have recovered, Khoo noted that the markets were still pricing in 70%-80% discounts.

    That is why Khoo said he prefers to put his money in China as cheaper opportunities can be found compared to other markets, like Australia.



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