Investing in Property vs Shares in Australia: A Comprehensive 2025 Guide

Property vs Shares in Australia

Investing in property and shares are two of the most popular ways for Australians to grow their wealth. Each has its own characteristics, benefits and considerations. Here’s a comparison to help you decide:

Australian residential property has performed well. According to the 2018 Russell Investments/ASX Long-term Investing Report, over the 20 years to December 2017, residential investment property returned 10.2% per annum.

In the same period, shares returned 8.8%. While shares can grow big, they are more volatile than property investments.

Aspect	Property	Shares
Historical Returns	10.2% per annum over 20 years (to Dec 2017).	8.8% per annum over the same period.
Asset Type	Tangible (real estate).	Intangible (stocks in companies).
Volatility	Lower volatility.	Higher volatility.
Market Resilience	Less prone to sudden market crashes.	Prone to market fluctuations.
Growth Drivers	Location, demand and economic growth.	Company performance and market trends.
Income Generation	Rental income.	Dividends (if applicable).
Long-Term Performance	Steady growth in good times.	Big growth over time.
Accessibility to Investors	Requires big upfront capital.	Lower barriers to entry than property.
Portfolio Diversification	Concentrated in one asset/location.	Easy to diversify across sectors and geographies.
Risk Profile	Lower risk but dependent on property market.	Higher risk due to share market.

Leverage

Property investors use mortgages to borrow 80-90% of the property’s value, which is like margin trading. This amplifies returns in rising markets but increases risk when interest rates rise or property values fall.

In shares, you can borrow up to 50% of the purchase price, making it more accessible but riskier. The higher volatility in the share market can mean quicker losses and margin calls.

Property leverage can give big gains but comes with big mortgage debt. Shares are easier to sell but more volatile, so quicker losses in uncertain markets.

Aspect	Property	Shares
Leverage Availability	High; 80-90% loan-to-value ratio.	Lower; 50% or less.
Impact on Returns	Leverage amplifies returns in an up market but increases risk in a down market.	Leverage grows gains, but shares’ volatility makes it riskier.
Risk of Loss	Higher risk of loss due to big mortgage debt.	Quick losses in volatile markets.
Interest Costs	Investors pay interest on loans, which reduces returns.	Borrowing costs vary, no interest if not using margin.
Market Influence	Property prices are affected by location, interest rates and market conditions.	Share prices are affected by company performance, market conditions and investor sentiment.
Liquidity of Leverage	Hard to sell quickly in a downturn	More liquid; can sell quickly but may trigger margin calls.
Loan Requirements	Big deposit required (usually 20-30%).	Margin requirements vary by broker and asset type.
Leverage Flexibility	Limited flexibility, fixed term mortgages	More flexibility; can sell to reduce margin exposure.
Capital Growth Potential	Big capital growth due to property value increase.	Big gains but highly volatile.
Borrowing Costs	Higher borrowing costs (interest rates) in economic downturns.	Lower borrowing costs than property but market dependent.
Risk of Margin Calls	No margin calls but risk of forced sale if payments default.	Higher risk of margin calls in volatile markets, asset forced sale.

Diversification

Diversification reduces risk, increases returns. Property investments require big capital, investors need 20-30% of the property value as deposit. Shares allow easy diversification with smaller amounts, often $500-$1,000.

Property investments need multiple properties to spread risk and the costs are big. Owning properties in different regions can cost several million dollars.

Shares allow easy diversification across sectors, industries and geographies, requires less capital. Investors can hold 20-30 stocks for better risk management, reduce individual risk.

Aspect	Property	Shares
Diversification Opportunities	Limited unless owning multiple properties in different locations.	Easily diversified across industries, sectors and geographies.
Capital Requirements	Big upfront capital to invest in multiple properties.	Less capital required; can invest in many stocks with small amount of money.
Risk Spread	Risk is in local real estate market.	Risk is spread across multiple companies and sectors, reduces individual risk.
Access to Global Markets	Limited to local or national markets.	Easy access to global markets through international stocks.
Ease of Managing Portfolio	Managing property portfolio is time consuming and costly.	Managing stock portfolio is relatively easy and cheap.
Liquidity	Properties are not liquid, takes time to sell.	Stocks are liquid; can sell quickly on market.
Market Volatility	Less affected by market volatility but sensitive to local economic conditions.	Highly volatile and market trend dependent.
Income Generation	Rental income provides regular cash flow.	Dividends from shares provide periodic income, not guaranteed.
Diversification within Asset Class	Limited diversification within real estate, need different properties or asset types.	Wide diversification possible, various asset classes like large-cap, small-cap or international stocks.
Geographical Diversification	Hard to achieve geographical diversification without big costs.	Easy to diversify geographically with limited capital.
Risk Mitigation	Diversification in property is slower and capital intensive	Diversification in shares reduces individual risk faster and cheaper

Liquidity

Liquidity means how easily an asset can be bought or sold without affecting its price. Both property and shares have different level of liquidity which affects investors ability to access funds.

Property is less liquid, takes time to sell and convert to cash. Market conditions, location and demand affects how fast property can be sold, often takes weeks or months to settle.

On the other hand, Shares are highly liquid and can be sold quickly on the market, usually within a day. This gives investors more flexibility and access to funds.

Aspect	Property	Shares
Liquidity	Less liquid; takes time to sell and convert to cash.	Highly liquid; can be sold on the market.
Time to Sell	Takes weeks or months to sell.	Can be sold in minutes during market hours.
Market Conditions	Property sales are affected by local market conditions, supply and demand.	Stock prices move throughout the day based on market sentiment.
Transaction Costs	Selling property involves big transaction costs, agent fees and taxes.	Transaction costs for stocks are low (brokerage fees).
Access to Funds	Property may take weeks to access funds.	Funds from selling shares are available in a few days.
Flexibility of Sale	Selling property requires more work, staging, repairs and negotiations.	Shares can be sold without preparation or negotiation.
Market Transparency	Less transparent; property prices may not reflect true market value due to negotiation.	Highly transparent; stock prices are real time.
Impact of Sale on Price	Selling property can affect its price, especially in a seller’s market.	Selling shares rarely affects the stock price unless in big volume.
Risk of Holding	Holding property exposes investors to market fluctuations and maintenance costs.	Holding shares exposes investors to market volatility but no maintenance cost.
Investor Control	Investors have control over the sale timeline and price.	Investors have no control over stock price fluctuations.
Exit Strategy	Exit strategy may involve selling at a loss if the market is against you.	Exiting a stock investment can be done quickly, even at a loss.

Management and Maintenance: Property vs. Shares

Property requires active management, repairs, inspections and tenant management. This takes time and annual maintenance cost is between 1-3% of the property’s value.

Shares however requires minimal management. Investors only monitor stock performance and market trends, no physical upkeep. This is attractive to those with limited time.

Property has ongoing maintenance cost, shares are more maintenance free. The simplicity and low involvement in managing shares is appealing to investors who wants a less hands on approach with minimal ongoing cost.

Aspect	Property	Shares
Management Requirements	Active management, tenant interaction, repairs and property maintenance.	Minimal management needed; investors only monitor stock performance.
Time Commitment	High time commitment for property upkeep, inspections and tenant interaction.	Low time commitment; monitoring is sufficient.
Cost of Management	Property manager fees, maintenance, repairs and insurance.	Brokerage fees, which are low.
Tenant Management	Managing tenants, leases and disputes.	No tenant management; stock performance is monitored.
Maintenance Costs	Ongoing maintenance costs for repairs, upgrades and inspections.	No physical maintenance cost; shares don’t require upkeep.
Property Management Options	Can hire property managers to do the day to day tasks but at an extra cost.	No need for management services, so it’s a more hands off investment.
Involvement in Decision-Making	Investors need to make decisions on repairs, tenant selection and improvements.	Investors have minimal involvement, usually only on buy/sell decisions.
Long-Term Management	Property requires ongoing care and attention to retain value and tenant satisfaction.	Shares don’t require physical maintenance but need to be monitored for performance.
Legal and Regulatory Concerns	Subject to local landlord-tenant laws, regulations and taxes.	Fewer legal concerns, mainly securities laws and tax implications.
Income Stability	Rental income can provide steady cash flow but subject to tenant vacancies and market conditions.	Dividends may provide steady income but dependent on the company’s performance.
Exit Strategy	Selling property can take time and effort.	Selling shares is easy and quick, no major obstacles

Tax Implications: Property vs. Shares

Taxation plays a big role in property and share investments as each has its own tax implications. Property investors have CGT upon sale and can claim depreciation.

For properties held over a year, CGT may be discounted by 50%. Investors can also claim mortgage interest. Shares are taxed for capital gains but can have franking credits to reduce tax liability.

Shares have simpler tax reporting compared to property. Investors in shares can enjoy dividend income with franking credits, making it a more attractive option for those who wants easier tax management.

Aspect	Property	Shares
Capital Gains Tax (CGT)	CGT applies on sale of property. 50% discount for assets held over 12 months.	CGT applies on sale of shares. 50% discount for assets held over 12 months.
Depreciation Deductions	Investors can claim depreciation on the building and certain assets, reducing taxable income.	No depreciation deductions for shares.
Franking Credits	Not applicable to property.	Shareholders can receive franking credits for dividends from Australian companies.
Rental Income Tax	Rental income is taxable and must be declared.	No rental income for shares; investors receive dividends which are taxable.
Negative Gearing	Investors can claim tax deductions on interest payments and expenses above rental income.	Not applicable to shares but some share investments may have tax deductions.
GST (Goods and Services Tax)	GST applies to commercial property transactions.	GST does not apply to buying or selling of shares.
Tax Reporting	Complex tax reporting due to rental income, expenses and depreciation.	Easier tax reporting, usually just dividend income and capital gains.
Income Tax	Rental income is taxed at the investor’s marginal rate.	Dividend income is taxed but franking credits may reduce tax.
Tax on Dividends	Not applicable; property generates rental income not dividends.	Dividends are taxed but may have franking credits to reduce tax.
Holding Period Tax Benefits	Property held over 1 year gets 50% CGT discount.	Shares held over 1 year also gets 50% CGT discount.
Tax on Sale of Investment	CGT applies on sale of property and profit is taxed.	CGT applies on sale of shares and profits are taxed.

Entry and Exit Costs: Property vs. Shares

Property investments have high entry and exit costs, stamp duty (3-5% of purchase price), legal fees and agent commissions (2-3%). This can eat up a big chunk of the profit.

Shares have lower costs. Investors only pay brokerage fees which is $5 to $30 per transaction, making share investments more cost effective.

This difference in transaction costs makes shares more accessible as the low entry and exit costs gives more flexibility and lower barriers to entry compared to the high costs of property investment.

Aspect	Property	Shares
Entry Costs	High; stamp duty, legal fees, inspections and agent commissions.	Low; brokerage fees and maybe an initial account setup fee.
Exit Costs	High; agent fees, legal fees and CGT.	Low; brokerage fees, minimal extra costs.
Stamp Duty	Applicable on property purchase and can be high.	Not applicable to share purchase.
Brokerage Fees	Not applicable; agent fees and legal costs are incurred.	Brokerage fees are paid when buying or selling shares, low.
Legal Fees	For property contracts, conveyancing and other legal processes.	Not applicable; no legal fees for share transactions.
Inspection and Valuation Costs	Required when buying or selling property.	Not applicable; no inspections or valuations needed for shares.
Capital Gains Tax	CGT applies on sale, reduces the net profit from the transaction.	CGT applies to share sales as well but overall lower costs.
Agent Fees	Real estate agent commissions are paid when selling property.	Not applicable; no agents involved in share transactions.
Financial Advice Fees	Investors may seek advice from financial planners or property experts and incur additional fees.	Financial advice fees are lower, mainly focused on portfolio strategies.
Transaction Speed	Property transactions can take weeks to settle, costs in time.	Share transactions are quick, often done in a day, minimal time costs.
Liquidity and Cost of Sale	Selling property can be costly and time consuming.	Selling shares is low cost and highly liquid, done in a day.

Income Stability: Property vs. Shares

Property investments offer stable income through rent, 3-5% annual yield. But this income can be affected by tenant vacancies or unexpected maintenance.

Shares generate income through dividends, 2-6% annual yield for blue chip stocks. But dividends are dependent on company performance and not guaranteed, can be cut in tough market conditions.

While property gives you cash flow, income stability is impacted by external factors. Shares gives you dividends with less predictability but subject to market and company health.

Aspect	Property	Shares
Income Source	Rental income is the only source of income, subject to market.	Dividend income from stocks, depends on company.
Income Stability	Stable if tenants stay, but can be affected by vacancies or maintenance.	Dividend income from established companies, variable.
Tenant Risk	Risk of rental income loss during vacancies or tenant issues.	No tenant risk; but companies can cut or suspend dividends.
Market Conditions	Sensitive to local property market and tenant demand.	Sensitive to company performance and broader economy.
Income Reliability	Steady income possible with long term tenants, but variable in fluctuating markets.	Income can be stable if dividends are paid regularly, but can be cut.
Growth Potential	Limited growth for rental income, increases with inflation.	Dividends can grow over time as company grows and profits.
Long-Term Consistency	Rental income can give you consistent cash flow over the long term if property is well maintained.	Dividend paying stocks can give you consistent cash flow, but subject to company performance.
Diversification of Income	Limited diversification unless you own multiple properties in different markets.	Easy to diversify across sectors and companies, spread income risk.
Tax Implications	Rental income is taxable and must be declared.	Dividends are taxable, but franking credits can reduce tax.
Inflation Hedge	Rental income increases with inflation, maintains value.	Dividend income may not keep up with inflation, especially if company cuts dividends.
Liquidity of Income	Rental income is monthly, but property may take time to sell if you need cash.	Dividend income is quarterly, shares can be sold quickly for cash.

Market Volatility: Property vs. Shares

Property has lower volatility, prices move 5-10% a year. Prices move slower, more stable during market downturns. Recovery takes longer.

Shares are highly volatile, can move 1-2% or more daily. Market events like economic reports and company performance can cause these price movements, can be gains or losses.

Property gives you stable returns with slower movements, shares gives you higher return potential with volatility. You must weigh the risk of sudden loss against higher growth.

Aspect	Property	Shares
Price Volatility	Property prices move slower, less frequent.	Share prices move rapidly.
Market Sensitivity	Less sensitive to daily market news but to broader economy.	Highly sensitive to economic reports, company news, global events.
Investment Duration	Long term investment reduces volatility impact.	Short term investment in shares can be very volatile.
Impact of Economic Downturns	Property values may go down but often recover over time.	Shares can decline sharply during economic downturns but can rebound quickly.
Liquidity and Volatility	Less liquid, so volatility in property market takes longer to affect investor.	Very liquid, so volatility can affect share prices immediately.
Risk Level	Lower risk due to slower price movements and less frequent changes.	Higher risk due to daily price changes and market speculation.
Price Recovery	Property values recover steadily, but takes time.	Share prices can recover faster but can be unpredictable.
External Factors	Affected by local market, interest rates, supply/demand.	Affected by global factors, political events, interest rates, market sentiment.
Market Sentiment	Less subject to sentiment driven price movements.	More influenced by investor sentiment.
Stability of Asset Class	More stable as an asset class, especially long term.	Less stable, higher risk due to broader market.
Diversification Impact	Lower diversification, so market volatility can affect entire property portfolio.	Easy to diversify, which reduces volatility risk across sectors.

Control and Value-Adding Opportunities: Property vs. Shares

Property investments give you control over decisions like renovations and tenant selection, can increase value. You can directly impact property value, improve appeal and optimize rental yields.

Limited control, investors rely on company performance and management decisions. Stock value is driven by market and company strategies, little room for individual influence.

Property investors have more opportunities to add value through active involvement, shareholders have minimal control. Shareholders depends on company’s action and broader market trends to determine value of their investment.

Aspect	Property	Shares
Control Over Investment	You have control over property decisions, renovations and tenant selection.	You have limited control; you rely on management decisions.
Value-Adding Opportunities	Property investors can add value through renovations, improve property appeal or optimize rental yields.	Value addition is limited to stock purchases and timing; no control over company operations.
Influence on Market Value	You can influence market value through property upgrades, location improvements and management strategies.	Limited influence; value depends on company’s performance and market.
Tenant and Lease Control	You have control over lease agreements, rent increases and tenant selection.	No control over dividend policies or company performance.
Capital Growth	Property owners can grow capital by making strategic changes.	Capital growth is driven by market trends and company decisions, out of investor’s control.
Flexibility in Decisions	You have flexibility to adjust property decisions like rent pricing or sale timing.	Limited flexibility; share sales are market dependent, and influence on companies is minimal.
Management Responsibility	You can manage property yourself or hire external management for operational control.	No management responsibility; shares are passively managed by fund managers.
Ownership of Asset	Direct ownership, you can make hands-on decisions on the property.	Indirect ownership; you own shares but don’t control the company’s action.
Time and Effort	Significant time and effort required for property management and value addition.	Minimal time and effort required for share management; you just monitor performance.
Exit Strategy	Control over property sale timing allows for strategic exit.	Exit timing is market and company dependent, limited control.
Risk of Overextension	You may over-improve or over-spend on property renovations and affect returns.	Minimal risk of overextension; financial risk is mainly market dependent.

FAQ

Which investment gives higher returns in Australia: property or shares?

In Australia, property has outperformed shares, residential property has 10.2% annual return over 20 years vs 8.8% for Australian shares. Property is generally less volatile.

Property investments grow steadily, especially in good times, over time. Shares offer higher short term gains as value fluctuates with market volatility, more growth potential.

Ultimately it depends on individual factors like risk tolerance, investment horizon and market conditions. Property offers stability, shares offer more growth.

What are the tax implications of investing in property vs shares?

Property investments incur capital gains tax (CGT) on sale profits, 50% CGT discount for properties held more than 12 months. Investors can also claim depreciation to reduce taxable income.

Rental income from property is taxed at your marginal rate. Shares are also subject to CGT, 50% discount for long term holdings. Dividend income from shares is also taxed.

Shares have a simpler tax process, with potential franking credits to reduce tax. Property investors have more complex tax reporting but can claim more deductions like depreciation.

How does leverage work differently in property and shares?

Leverage in property is 80-90% of the property’s value, amplifies returns in rising market. But increases risk, especially if interest rates rise or property values decline.

Leverage for shares is usually 50% of the purchase price. Shares are more liquid and easier to sell but volatility can lead to quicker and bigger losses when leveraged.

Property investors use mortgages for long term capital growth, benefit from market stability. Leveraging shares carries higher risk, especially in volatile conditions where losses can be bigger.

What are the risks of property investment vs shares?

Property investments are less volatile, not affected by daily market movements. But sensitive to interest rates, location and local economy, risks like tenant vacancies and maintenance costs.

Shares are very volatile, daily price movements driven by economic trends, company performance and investor sentiment. They offer higher short term returns but higher risk of rapid losses, needs to be managed carefully.

Property offers more stability but bigger capital commitment and harder to sell. Shares are more liquid but more volatile and riskier.

How does liquidity differ between property and shares?

Property is less liquid than shares, sales can take weeks or months depending on market conditions and location. Transaction costs like agent fees, inspections and taxes slow down the process.

Shares are liquid, can be transacted in minutes during market hours. Investors can get access to their funds by buying or selling shares, more flexibility for those who need cash quickly.

In contrast to property which takes time and effort to sell, shares offer faster access to cash, more flexible investment.

What are the initial costs of investing in property vs shares?

Investing in property involves high upfront costs, stamp duty, legal fees, agent commissions and potential renovation costs. These can be 5-7% of the property’s purchase price, big expense.

Shares have lower initial costs, mainly brokerage fees for transactions. Minimal setup fees may apply when opening a brokerage account, shares are more affordable for small investors.

The lower entry costs of shares make them more accessible to a broader range of investors than the big capital required for property investments, more flexible option.

How do the ongoing maintenance and management requirements differ?

Property investments require significant ongoing management, maintenance, tenant management and repairs. You may need to hire a property manager and maintaining the property’s value takes time and money.

In contrast, share investments require minimal management, just monitor performance and market trends. No physical maintenance costs, no tenants to handle, no upkeep, shares are more passive.

Shares offer a hands off investment with lower time commitment, perfect for investors who want less involvement and less responsibility than the more active management required for property investments.

What is the role of diversification in property and share portfolios?

Diversification reduces risk by spreading exposure across different assets. Property investments limits diversification because of the big capital required, concentration in one or few locations.

Shares offer easy diversification across industries, sectors and geographies, investors can build a portfolio with different risk exposure. Owning shares in multiple companies or countries reduces the risk tied to individual assets.

Diversification is more accessible and cost effective with shares, especially for smaller investors, more flexible way to reduce risk than the bigger capital required for property investments.

How do economic factors affect property and share markets?

Economic factors like interest rates, inflation and employment levels affect both property and share markets but differently. Property markets are sensitive to interest rates, higher rates makes mortgages more expensive, reduces demand.

Property values are dependent on local economic conditions and area specific demand. Shares are influenced by broader economic factors, company performance, global events and investor sentiment, more price fluctuations.

While share prices adjust quickly to economic changes, property markets are more stable, slower response to interest rates, inflation and other economic conditions.

What are the benefits of negative gearing in property vs shares?

Negative gearing in property is when expenses like mortgage interest, repairs and depreciation exceeds rental income. This loss can offset taxable income, reduce tax liabilities but carries risk especially in declining markets.

For shares, negative gearing is less common but investors can use margin loans to invest. Interest payments on these loans are deductible against income, tax benefits but shares are more volatile so more risk.

Negative gearing in property may lead to capital gains if property values go up, but riskier in the stock market because of share price fluctuations and market volatility.

How do capital gains tax work in property and shares in Australia?

Both property and share investments are subject to capital gains tax (CGT) when sold at a profit. Property investors get 50% CGT discount if they hold the property for more than 12 months.

Shares also get the same CGT discount if held for more than a year. But property investors can claim depreciation deductions, reduce taxable income and potentially lower capital gains tax.

Tax treatment of shares is simpler, fewer deductions available. But investors can get franking credits on dividends, reduce their overall tax liabilities.

What happens when interest rates change in property vs shares?

Interest rates affect both property and share investments but differently. Higher interest rates increases mortgage payments, reduces affordability and potentially lowers property values, lower rates boosts demand.

For shares, interest rate hikes increases borrowing costs for companies, affects profitability and share prices. Higher rates also makes bonds more attractive, potentially diverts investment from equities, affects stock market performance.

Property is more directly affected by interest rate changes, as they impact mortgage costs and property demand. Shares are influenced by broader market reaction and company performance.

How does rental income from property compare to dividend income from shares?

Rental income from property provides steady cash flow but is subject to tenant vacancies, maintenance costs and fluctuating market demand. Investors must manage tenant relations and property upkeep, affects cash flow stability.

Dividend income from shares is paid quarterly and is passive income. While dividends can be stable, they depend on company profitability and not all companies pay dividends, so less predictable.

Property offers more predictable income, dividend income from shares may fluctuate based on company performance and broader economic conditions, less stable than rental income in some cases.

What are the barriers to entry for new investors in property vs shares?

Property investment requires significant capital, often 20-30% deposit plus transaction costs like stamp duty, legal fees and inspections. This can be a big entry point for new investors without big savings.

In contrast, shares have lower barriers to entry. Investors can start with small amount of capital, more accessible to a wider audience. Brokerage accounts are easy to open, minimal upfront costs.

Shares allow investors to diversify even with limited funds, more flexible and affordable investment compared to big capital required for property investments.

How volatile are the Australian property market vs stock market?

Australian property market is less volatile than the stock market. Property prices change slowly, driven by long term economic trends, interest rates and local market conditions, so safer short term investment.

In contrast, the stock market is very volatile, stock prices change daily. These changes are driven by company performance, investor sentiment and global events, so higher risk of price swing.

While property is more stable, stock market offers higher short term returns but with higher risk due to its volatility.

What are the benefits of investing in Real Estate Investment Trusts (REITs) vs direct property ownership?

REITs allows investors to get exposure to the property market without the capital intensive nature of direct ownership. They offer liquidity, shares can be bought and sold like stocks and diversification.

Direct property ownership offers more control, including property management and improvements. But requires higher capital and more hands on involvement, maintenance and tenant management.

REITs have lower entry cost and easier to manage but no direct control and potential for capital appreciation that direct property investments offer, so more passive investment.

How much time commitment required to manage property vs shares?

Property investments require significant time and effort for management, tenant relations, maintenance, repairs and inspections. Hiring a property manager adds extra cost, so more hands on investment.

In contrast, share investments are much less time consuming. Investors just monitor stock performance, read market updates and occasionally rebalance portfolios. This low time commitment makes shares more passive investment.

Time and effort required for property management makes shares a better option for investors who want more passive investment, returns with less ongoing involvement.

What are the implications of property market cycles vs share market cycles?

Property market cycles are slower and less frequent, driven by interest rates, government policies and economic growth. These cycles take years, growth is gradual then slow down and steady appreciation.

In contrast, share market cycles are more volatile, prices change based on economic news, company performance and investor sentiment. Bull and bear markets happens rapidly, short term price swing, so share market cycles are more unpredictable.

While property market cycles are long term, share market cycles are shorter and more erratic, fluctuations happen faster in response to broader economic conditions and investor behavior.

How do government policies affect property and shares differently?

Government policies affect both property and shares, but in different ways. Property is affected by policies like stamp duty, interest rates, negative gearing and rental laws, affecting values, rental yields and tax benefits.

In contrast, share markets are affected by corporate tax, dividend tax and company regulations. Government stimulus programs or fiscal policies can directly impact market sentiment, stock prices and company performance.

Both asset classes are affected by policy, but property is more directly affected by specific regulations, while share markets respond more to broader economic and regulatory changes.

What are the pros and cons of investing in Australian shares vs international shares vs property?

Investing in Australian shares gives you exposure to the local economy, easier tax and fewer currency risks. But limits diversification, especially during market downturns and may expose you to concentrated risk.

International shares gives you geographic diversification, access to global markets and reduce risk. But introduces currency fluctuations and tax complexity, so more complicated to manage than domestic shares.

Property investments gives you long term stability and physical assets but requires significant capital and limited diversification. Shares generally gives you more liquidity and lower cost, international shares gives you broader diversification across markets.

Originally Published: https://www.starinvestment.com.au/investing-property-vs-shares-australia-2025/