Property vs Shares: Which is Better for Building Wealth?

For decades, Australians have debated the age-old question: property or shares?

The truth is, both have pros and cons. And while property has been the golden child of the last 30 years, the landscape may be shifting.

🏡 Property: The Pros

• Leverage: You can borrow against property more easily than shares, magnifying returns (and risks).
• Tangible asset: People like owning something they can see, touch, and live in.
• Cultural preference: Property has long been Australia’s comfort zone — “safe as houses.”
• Tax benefits: Negative gearing, capital gains discounts, and the family home being CGT-free.

🏡 Property: The Cons

• Illiquidity: You can’t sell a bedroom if you need cash — it’s all or nothing.
• Costs: Stamp duty, rates, maintenance, insurance, and transaction costs eat into returns. This is what you don’t see or people tell you when they hold investment property.
• Concentration risk: One property ties up a large portion of wealth in one location and asset type.
• Future headwinds: The last 30 years saw falling interest rates (think 15% in the 80’s), population growth, and strong credit expansion. Going forward, affordability constraints, and tax policy changes may limit the upside.
• Retirement reality: As people move into retirement, many don’t want the hassle of tenant issues, maintenance, and repairs. The appeal shifts toward simpler, more liquid investments that don’t require constant management.

📈 Shares: The Pros

• Liquidity: Easy to buy and sell, even in small amounts.
• Diversification: Access to thousands of companies, industries, and global markets.
• Dividends & growth: Potential for both income and capital appreciation.
• Low costs: Minimal transaction costs compared to property.

📈 Shares: The Cons

• Volatility: Prices can move daily, often spooking investors.
• Behavioural risk: Many investors panic-sell in downturns. This is where people come unstuck with these investments.
• Leverage is limited: Harder to borrow large sums against shares, but it can be done.
• Less tangible: You can’t “live” in your share portfolio, which makes it feel less real for some people.

⚖️ So, Which is Better?

Neither is inherently better — it depends on your goals, time horizon, and tolerance for risk and what you are trying to achieve.

But here’s the question worth asking: will property deliver the same returns in the next 30 years as it has in the past?

• Interest rates are unlikely to fall like they did from the 1990s to 2020.
• Wage growth and affordability put a cap on how far prices can stretch.
• Policy changes (negative gearing, CGT, super caps) may also shift the playing field.
• We have had the rise of the dual household income which has helped with higher property prices.

That doesn’t mean property is a bad investment. But it will property have the same return profile it did over the past 30 years, compared to the next 30 years?

And once you’re approaching or in retirement, the simplicity and liquidity of shares (or other managed investments) often outweighs the appeal of managing a property portfolio.

🚀 The Smarter Play?

A balanced approach. Property can be a powerful wealth builder, but pairing it with shares gives you liquidity, diversification, and freedom from the day-to-day headaches of managing tenants and maintenance in retirement.

Wealth isn’t about choosing one or the other. It’s about knowing how each fits into your overall strategy at every stage of life and what is sustainable for your lifestyle.

👉 Question for you: Do you think property will still outperform over the next 30 years, or will shares take the lead?

Please contact us if you found this information useful. 

We are Financial Advisors based in Brisbane, but serve Australia wide.