Property and wealth go hand in hand.
ANALYSIS
Australia suffered a monumental sharemarket plunge this week, the biggest single day sell-off since Covid. It served as another reminder why I like investing in property.
The world is an uncertain place these days and markets don’t react particularly well to uncertainty.
Property however, is free from the wild fluctuations of value that other assets are prone to in volatile times.
Property values do fluctuate, but almost always in line with the same familiar cycles. They rise, they plateau, they correct, they recover and then they rise again.
It’s little wonder property is far and away the most popular asset class in Australia, with more than $12 trillion invested in residential real estate, compared to roughly $3 trillion in Australian-listed stocks as at the end of 2025.
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But if you’re still not convinced, here are a few reasons I believe property is the superior asset.
Ride the inflation train
It really seems like we just can’t beat inflation at the moment. So if we can’t beat it, let’s ‘join it’, by investing in an asset where returns are also inflated.
Property can be a reliable hedge against inflation, because the inflated costs of building a property such as materials and labour, drive up the values of homes that are already built.
Rental income is also tied to inflation. So while interest rates rise and mortgages become more expensive, the rent your investment property receives also rises and offsets some or all of the damage.
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Meanwhile, the debt you owe on a property is reduced or remains the same.
There’s a lot of uncertainty around the world at the moment. Picture: John Appleyard
Enjoy greater stability
Unlike the stock market, property prices don’t fluctuate minute-by-minute. You don’t see billions of value wiped off property markets on a rough morning.
Your property doesn’t simply disappear. It is made of physical materials, it sits on land that has a value and it is occupied by someone who needs a home, signs a lease for a certain period of time and pays you rent for that opportunity.
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This creates more of a sense of security for investors and allows you to ride out turbulent times.
In fact, some of those stockmarket “billionaires” out there aren’t really billionaires at all. If Warren Buffett began selling his shares to try to cash in, those shares would begin falling in value simultaneously.
Leverage money you don’t have
Thanks to banks and home loans, you can access 100 per cent of a property’s value, potential gain and rental return, for just a 20 per cent deposit.
If you put $100,000 into any other asset and it doubled in value, you’d get $200,000.
Do the same with property (plus paying stamp duty) and you can get $500,000. If you are paying interest only on the asset and the rental return covers that payment plus rates and water, you won’t need to pay to access that wealth.
Warren Buffett would not be able to cash in all his shares without their valules falling. Picture: Saul Loeb.
Control over the asset
An investment property is yours and you can make decisions on a range of things that can affect its value. You can choose tenants, property managers, set the rent and make decisions on maintenance.
Other assets force you to rely on the performance of a company’s management team, or fund manager, on top of external market conditions, with no way to assert any direct influence.
You can also physically add value to a property, through renovations or superficial upgrades.
Good luck going down to a listed company and adding an extra bathroom to their office block.
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Income streams
More people are looking to secure multiple income streams to hedge against exposure to job uncertainty.
Property can pay for itself through rental income, if it’s positively geared. Equity gains can be used for further investment and more income streams.
After loans are paid off, investors can find themselves with enough passive income to replace the need to work, especially if they have accumulated a portfolio with multiple properties.
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