Property Versus Shares. What 25 Years of Data Actually Shows

Every few years the same debate resurfaces. Property versus shares. Which has really delivered long term wealth.

A new long range analysis comparing Australian housing markets with global share indices provides a clear answer for the past 25 years. Australian residential property has outperformed major share markets over that period. In several cities, by a significant margin.

Since 2000, Adelaide house prices have risen by approximately 559 per cent. That places it at the top of the performance table among Australian capital cities. Brisbane, Hobart and Sydney follow, each recording growth in excess of 450 per cent over the same timeframe.

These results sit ahead of major US equity benchmarks across that 25 year window. The Nasdaq rose around 415 per cent and the S&P 500 approximately 348 per cent. Strong outcomes, but still behind Australia’s major housing markets when measured from the same starting point.

As always, the starting date matters.

If the clock is wound back to 1995, the picture shifts. The US technology boom of the late 1990s dominates global share performance, while Sydney’s pre Olympics property surge pushes house price growth to around 770 per cent. Different cycles produce different winners depending on where measurement begins.

It is also important to distinguish between property types.

Not all real estate has performed equally. Real estate investment trusts rose just 38 per cent over the period. The ASX200 increased by around 158 per cent. These figures reinforce a point I have made consistently. Direct residential property has behaved very differently to listed property vehicles and broad equity indices.

The reasons behind property’s long term outperformance are well documented. Decades of falling interest rates. Strong population growth through immigration. Chronic undersupply of housing. And tax structures that have favoured property ownership.

At the same time, no market grows without limits. Affordability constraints are real and will influence future growth rates. That does not negate past performance, but it does require more careful selection and strategy going forward.

Other asset classes also deserve context.

Gold has risen approximately 1402 per cent over this period. Bitcoin remains an outlier, moving from under one US dollar to around US ninety thousand. These returns are extraordinary, but they come with volatility profiles that most households cannot tolerate or rely upon for long term planning.

Data does not replace judgement. But it should inform it.

When viewed over multiple decades, Australian residential property has proven to be one of the most consistent wealth building assets available to ordinary Australians. That consistency, rather than headline spikes, is what matters most.