One of my favourite authors on the subject of property is Dolf de Roos. I think I've read his bestselling book Real Estate Riches around a dozen times and constantly draw on his principles both for my own portfolio and those of my clients.

Dolf tells of how as an undergraduate he conducted a 9 month study of the rich in order to determine what qualities they had in common. Attributes they did not share were age, gender, race, creed, country of origin or education. Surprisingly, it did not even matter whether or not they were born into rich families.

The one common denominator however was that without exception, they all either made their money or held their wealth in property.

Now I don't know exactly what year he conducted this study but I do believe that if we had to replicate it today we will come up with very similar findings.

The Sunday Times annual rich list tracks the 1000 riches people in Britain and every year I find it unsurprising that the majority are on the list because of property. In 2007 property accounted for the fortunes of 3 out of the top 10, and 33 out of the top 100.
So in the age of the $100 oil barrel and the $1000 gold once it seems property may still be the choice of the rich. And for those of you who would like to get on the list - a nice round £70m will get you on at number 1000.

What about shares? Well, a recent study tracked the 20 year performance of a £100k invested in either the FTSE 100, gold or cash on deposit. It concluded that property geared at 75%LTV outperformed these asset classes by nearly four times. How's this possible?

Quite simply that most basic of economic principals that even a child can grasp namely Supply and Demand. If you don't understand this principal I would recommend you try and buy tickets to see your favourite band or sports team after all the tickets are sold. There where reports of punters paying £5000 for a single ticket for the recent Rugby World Cup Final between England and South Africa even though they originally sold for £185.
Now THAT's supply and demand in action!

And like Mark Twain's famous quote above states quite clearly - land is something that's in limited supply. This principle combined with a strong currency remains the primary reason I invest in the UK. The current population of the UK is around 60 million even though it's only around one 5th of the size of South Africa with a population of 47 million. Matters are further exasperated by net foreign immigration flooding into the country. Official government figures show around 292,000 immigrants entered the country in 2005 and according to Government projections; immigration will add around 6 million to the population by 2031. Another sad truth is that due to the ever increasing divorce rate more than 7 million people in Britain live alone. The average age of the first time buyer in the UK is 34. Gordon Brown recently declared that the country currently needs more than 240,000 additional homes a year, but until now, the National House Building Council (NHBC) has been averaging only around 170,000 per year.

So what does this all mean? Simply, that there is an ever increasing demand for housing and a limited availability. When you couple these factors with low affordability from first time buyers the result is a strong case for both rental and capital growth in the medium to long term.

Take a few minutes and think about what the best investment is you have ever made.

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I look forward too speaking to you soon.

Mike Smuts
Property investor and Managing Director of Smuts & Taylor.