Property Investment vs Shares

The following are the disadvantages of property investment

• Property prices are less volatile than shares – house prices are relatively stable over time compared to fluctuations that can be seen with shares on a daily basis. 

• Property has less risk than shares – Property value is less likely to create a loss than shares but then can also lead to a lower return. The quality of the property or share can impact this. 

• Property investment can be leveraged more than shares  - you can borrow a greater proportion of your property investment than your share investment. 

The following are the advantages of property investment vs shares.

• With property investment it is difficult to enter the market on a small scale. Unlike shares which can be purchased in units as small as one share, property needs to be purchased as a whole unit which is tens to hundreds of thousands of dollars.  

• Properties have numerous ongoing taxes and expenses such as land tax, rates, water payments and other ongoing maintenance.  

• Property investment is less liquid than shares – it is alot more difficult to sell an investment property quickly to satisfy short term cashflow needs.

Capital gains tax applies to both property investment and shares.

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