Property: Introduction - Opportunities knock for sector

Property is considered to have been at the eye of the credit crunch storm, but this is somewhat disingenuous. There could have been any number of asset classes embroiled in toxic derivative instruments, and it is these instruments - not the asset class itself - which brought the house of cards down.

Constrained liquidity in the property market as a result of the 'credit crisis' led to a number of high-profile 'lock-ins' to several property funds. This combined with mortgage lending woes, housebuilder stocks being pummelled by a jittery market and a general fear of both residential and commercial property compounded negative sentiment - some would say, out of all proportion - about property.

Yet, 18 months later, that outlook has certainly brightened. The green shoots0 of economic recovery have buoyed commercial property and the low interest rate environment has encouraged investors to reconsider risk assets, overseas as well as domestic – offering greater diversification.

Diversification need not only relate to geographic locations but also extends to the wealth of different vehicles and subsectors this asset class offers. Reits, Oeics, investment trusts and ETFs offer investors different routes while an article in this supplement by Ecclesiastical's Ketan Patel shows property investing is not all about the 'prime' - social housing can also reap lucrative returns.

Freelance journalist Cherry Reynard explores whether liquidity is an inherent downside of investing in property and how the crisis has shapes this debate, while Jason Biggs of BDO examines the role of banks in this sector.

If a recent survey by Reita is correct - that two-thirds of IFAs are expecting the property market to bounce back in 2010 - this could be the year in which, begrudgingly, we all admit to have being too hasty about its demise.

Anna Lawlor is features editor at Investment Adviser