Investors bearish on property prospects

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Australian investors are increasingly concerned about elevated property prices in Australia, according to two new surveys.

Surveys by the Australian Investors Association and financial markets news service FNArena have revealed that Australian house prices are "an area for concern".

"Australian property is just teetering on the edge of a cliff, finally catching up with the rest of the world and reality," said one respondent.

"I am not comfortable with the proportion of my net worth allocated to property. I don't see the local property market as a bubble, but I do see it as above trend. I expect better returns from equities over the next 10 years," added another

However, the surveys also found that respondents were equally bearish on the share market, with sentiment "overwhelmingly cautious". Key concerns included high oil prices on the back of political instability in North Africa and the Middle East, the ongoing nuclear threat in Japan, sovereign debt problems in Europe, a potential shift in monetary policy in the US and well as a perceived anti-business climate in Canberra

Overall, 21% of the 460 respondents to the AIA survey indicated they were bullish about the market, 27% bearish and 52% neutral; meanwhile, 26% of the 281 respondents said they they were bullish about the share market, against 20% bearish and 54% neutral.

Investment portfolios were remarkably similar across both surveys, with equities averaging 53% of portfolios, property 19%, fixed income 9% and cash 19%.

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