ABSTRACT

Residential property has long been recognised as an important component in a household’s overall wealth. The sheer magnitude of purchasing a house has compelled households to commit a disproportionate amount of their funds to own a house, leaving little capital for other kinds of investment. The findings of this Malaysian study show that an allocation between 50% to 65% of the available capital to residential property, particularly in terraced houses, in any of the 5 main regions, and with the balance invested in bonds will produce a superior personal  investment portfolio, in terms of enhanced risk-adjusted return and significant reduction in the overall risk. Holding a non-diversified portfolio not only produces sub-optimal returns, but also exposes households to greater risk which can easily be minimised through mixed-asset portfolio diversification. Full paper [pdf 1] [pdf 2]

To cite this paper: TAN YEN KENG and TING KIEN HWA (2004) THE ROLE OF RESIDENTIAL PROPERTY IN PERSONAL INVESTMENT PORTFOLIOS: THE CASE OF MALAYSIA. Pacific Rim Property Research Journal, Vol 10, No 4, pp 466-486