It is a simple truth of the investment world that property has proven a better investment for more people than any other asset class. You can look at this anecdotally and think how many people do you know who have made a substantial sum through property and how many through shares or starting a business?

This has usually happened more through luck than judgment as most people buy a home that they actually intend to live in. However, this is also the bedrock of the property market and provides the stability of residual value. In short, everyone has to live somewhere so a house will always be worth something.

Other investments do not necessarily have residual value.

War risk

Of course, a house can vanish in a war zone, as seen in Lebanon recently. But provided you buy in a geopolitically stable area then your investment is secure. Bricks and mortar are the ultimate in hard assets and need bombs to wipe them out.

Indeed, property is generally regarded as a 'safe haven' asset. Yet at the same time the ups and downs of the property market do provide opportunities for exceptional capital gain.

The best way to make a fortune in property is to buy at a low-point in the cycle when prices are cheap, and to do so with borrowed money. Using a loan to buy a property amplifies the upward leverage against the original equity, so the return is higher; unfortunately, the reverse applies and a fall in the value of a leveraged property will hit the equity element first.

There are also fortunes to be made in improving existing properties. This can be a cosmetic change like a lick of paint or an almost surgical rearrangement of internal accommodation. But the cost involved always needs to be finely measured against the potential gain.

People in Dubai often buy to avoid paying the high rents of the city. In many developed markets paying down a mortgage over 15 or 25 years is generally considered a good alternative to paying rent as the residual value is high, i.e. you end up owning a valuable property after the mortgage period instead of nothing.

Even if mortgages at first cost more than rentals, and this tends to change over time as inflation impacts on rents and house prices, then it is arguable that a mortgage is a savings discipline that the average person would otherwise just not follow. No wonder property remains the most popular investment class worldwide.