admin-ajax.php

Research reveals equities investment is not as safe as houses

It will come as no surprise to property punters that recent research from Oliver Hume has revealed the Melbourne apartment and townhouse market has outperformed shares as an investment over the past thirty years. I certainly wasn’t surprised by the data!

While the average annual capital growth of Adelaide and Sydney apartments trailed the sharemarket’s per annum gain of 7.7% – at 7.1% and 7.4% respectively – Melbourne unit prices rose by an average 8.9% between September 1980 and September 2010.

Oliver Hume’s research, published in the Sydney Morning Herald, also points out the consistency of property compared to the equities market, with the 2007-08 collapse of the stock market at the height of the global financial crisis highlighting the steady gains that can be expected from real estate over the long term.

When comparing the S&P/ASX 200 Index and median unit prices from the Real Estate Institute of Australia, they found that the sharemarket actually outperformed units until September 2007, when the GFC struck.

National general manager of research with Oliver Hume Andrew Perkins says of the research, “It just shows that the set-and-forget nature of property can provide less-spectacular returns but it also highlights the volatile nature of the ASX.”

While property and equities values have intersected at various points in time, particularly during the 1982 recession, at the end of 1980 the value of equities plummeted as property prices surged.

Perkins says that a unit bought for $50,000 in 1980 was now worth about $450,000, but this price growth did not take into account further investment returns provided by property through things like depreciation and rental income.

While some people have made millions from shares, the evidence is clear – for the average Australian looking to build wealth in a stable and consistent way, there is nothing quite as safe as houses!

Source: Sydney Morning Herald



icon-podcast-large

SUBSCRIBE & DON'T MISS A SINGLE EPISODE OF MICHAEL YARDNEY'S PODCAST

Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.

icon-email-large

PREFER TO SUBSCRIBE VIA EMAIL?

Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.


Avatar for Property Update

About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


'Research reveals equities investment is not as safe as houses' have no comments

Be the first to comment this post!

Would you like to share your thoughts?

Your email address will not be published.
CAPTCHA Image

*

facebook
twitter
google
0
linkedin
0
email

Michael's Daily Insights

Join Michael Yardney's inner circle of daily subscribers.

NOTE: this daily service is a different subscription to our weekly newsletter so...

REGISTER NOW

Subscribe!