Are Australian Equities Now Outperforming Property Investments?

For decades, Australian real estate has been the go-to investment for many, but 2024 saw equities take the lead in terms of returns. With the ASX delivering an impressive 11.4% total return, it outpaced the 8.3% recorded by the housing market, raising questions about where investors should focus their attention in 2025.

Annual change in returns: Equities v Housing

Equities vs. Property in 2024

The ASX S&P Accumulation Index, which factors in both share price growth and dividends, broke records last year, buoyed by strong performances in t

he banking and tech sectors. Meanwhile, the housing market showed signs of slowing after a strong start, with CoreLogic reporting the first national property price decline in nearly two years by December.

To put these returns into perspective:

• A $500,000 investment in the ASX at the start of 2024 would have delivered $15,500 more than the same investment in residential property by year’s end.
• International share markets fared even better, highlighting global opportunities for savvy investors.

What’s Driving the Trends?

Property

• Affordability Constraints: With interest rates remaining high and housing affordability stretched, demand has weakened.
• Increased Supply: Rising housing stock has begun to ease price pressures in many markets.
• Rental Growth Slows: A stabilizing rental market and growing average household sizes have cooled what was previously a hot rental sector.

Equities

• Market Momentum: The ASX surpassed 8,000 points for the first time, driven by optimism around tech and financial stocks.
• Global Confidence: Renewed faith in economic stability, spurred in part by global political developments, has bolstered investor sentiment.

The Long-Term View

While equities outperformed housing in 2024, property has historically offered stability and long-term gains. Over the past decade, housing delivered a total return of 132.6%, slightly edging out equities at 126.4%. Furthermore, real estate continues to hold the lion’s share of Australian household wealth, valued at $11.36 trillion compared to $1.49 trillion for shares and equities as of September 2024.

However, diversification is key. Both asset classes carry unique risks and rewards, and choosing the right investment often depends on your financial goals, risk tolerance, and investment timeline.

Plan Your Investment Strategy with Vantage Loans

Whether you're looking to finance your next property investment or diversify into equities, Vantage Loans can help you make informed decisions tailored to your needs. Our expert advisors are here to guide you through competitive loan products and strategies to maximize your returns.

Contact us today at 1800 595 500, email [email protected], or visit vantagefinancial.com.au to start building your investment portfolio.