How real estate is separate from the stock market

Remember April 2025? Trade tensions flared and global equities saw their biggest drop since the pandemic. Investors were glued to their screens, refreshing charts and news feeds. Every hour, every headline.

But while stock markets were slipping, Dubai hit new records.

There were 17,979 property sales in April 2025. A 55.4% jump from the year before. One moment. Two very different stories.

What most portfolios get wrong

You might think you're diversified. A bit of stocks, some bonds, maybe a little real estate through a REIT. Sounds balanced.

But if everything falls at once when sentiment shifts, you’re not diversified. You’re exposed.

Correlation is when assets move together. And most investors underestimate it.

One study looked at 145 years of global data and found something clear: stock and real estate markets don’t respond to the same forces. They move on different timelines, powered by different drivers.

Why property doesn’t follow the herd

Stocks are built on sentiment. Forecasts, expectations, policy changes, headlines. They react within minutes. Seconds, even. High-speed trading makes sure of that.

Property? It plays the long game.

It responds to supply and demand. Construction pipelines. Jobs and population growth. These change slowly. And that can work in your favour.

Stocks are easy to buy and easy to sell. That also makes them easy to panic-sell. Real estate takes more thought. It takes time. That friction isn’t a bug. It’s a feature.

And when it comes to income? Stocks can pause or cancel dividends without warning. Rent, on the other hand, is set by lease agreements. It keeps flowing.

What about REITs?

Not all real estate is created equal. If your exposure is through listed REITs, you’re still tied to the stock market. They trade like any other share. And they tend to fall when markets fall.

Direct property exposure, whether you own it outright or through fractional platforms, behaves differently. It remains tied to real-world demand, not trading sentiment.

So when you're looking for true diversification, how you access real estate matters just as much as if you do.

Why the ‘60/40 rule’ broke down

For decades, investors relied on a simple idea: stocks for growth, bonds for safety. A 60/40 split was seen as solid.

But in 2022, both stocks and bonds delivered negative returns. At the same time.

That shook the foundation. Especially in inflationary periods, these two asset classes have moved more closely together.

That's why institutional investors have dramatically increased their real estate allocations. Pension funds have grown allocations to real estate, private equity, and infrastructure from 4% to about 20% combined. Leading endowments like Yale maintain 9-11% in direct real estate. Not for the yield. For the uncorrelated risk: the stability these assets provide when equities fall.

They’re not trying to outguess the market. They’re trying to make sure everything doesn’t fall apart at once.

What this looks like in real life

You’re not choosing between stocks and real estate.

You’re choosing between:

A: A portfolio where everything is linked, so when one asset drops, they all do.

Or

B: A portfolio where stocks provide growth, bonds offer stability, and real estate adds income and long-term appreciation that isn’t tied to daily headlines.

Real estate doesn’t replace equities, it complements them. It introduces returns driven by real-world activity, people moving in, jobs being created, rents being paid, not speculation or noise.

Data shows that when you combine equities, bonds and real assets, you can achieve similar long-term returns with far less volatility.

Is real estate investing for you?

It might be, if:

✔ You own stocks and notice they tend to move the same way

✔ You want income that doesn’t depend on investor sentiment

✔ You’re thinking long-term and can leave your money in

✔ You understand this is about smoothing the ride, not removing all risk

Maybe not, if:

✘ You need quick access to your cash

✘ You assume real estate can’t lose value (it can, just differently)

✘ You’re looking for guaranteed returns

What’s next?

Markets will keep reacting quickly to news and policy shifts. That’s how they’re built.

But real estate operates on a different timeline. It’s tied to local factors, lease agreements, demand, population growth, not sentiment.

Understanding how these asset classes behave is how you build a portfolio that holds up. One that’s built for cycles, not spikes.

With Stake, you can access real estate investing from just AED 500.

All investments carry risk. Stake Properties Limited is regulated by the DFSA as an Operator of a Crowdfunding Platform in the UAE.