Property versus shares – the age old question

It is one of the most debated and uncertain questions of investing – shares or property. Both classes have their advantages and drawbacks, with different levels of risk and return, and as such the answer will almost invariably come down to personal preference.


In any case, for investors looking for an intelligent, long-term solution and who don’t have the time or the resources to continually monitor the performance of their investment, residential property should certainly be considered as a viable option.


Charles Tarbey, Chairman of CENTURY 21 Australasia, recently contextualised this issue and put forward some compelling arguments as to why property investment might be the way to go in today’s turbulent global marketplace


“Over the first five-and-a-half months of 2012, the Australian equities market has experienced some extreme fluctuations driven in part by instability in Europe, softening growth in China’s economy and lingering negative consumer sentiment,” said Charles Tarby. 


“While the Australian property market as a whole has seen stagnant or depressed growth this year, values have not fluctuated to the extremes or lows that many shareholders of listed companies have endured, and as such, many investors may now be looking closely at buying opportunities in the property market.


“With good stock levels, stagnant or depressed value growth of late, and many buyers sitting on the sidelines – market conditions continue to favour purchasers,” continued Charles Tarbey.


The benchmark S&P/ASX 200 took a sharp drop over May, falling 7.3 per cent - the biggest monthly slide the Index has experienced in two years. 


Similarly, the housing market further retreated in May, with RP Data-Rismark reporting that national residential property values dropped 1.4 per cent over the month, and 5.3 per cent over the year. 


Despite such, RP Data-Rismark emphasised that luxury homes had accounted for the bulk of the drop in overall values, with premium dwelling values having fallen 6.1 per cent over the past year, as opposed to 1.5 per cent for dwelling values at the affordable end of the spectrum.


Charles Tarbey did, nevertheless, emphasise that any property investment should be a heavily considered process. He explained that “while many investors may be seeking out property opportunities in this market, property investments should be viewed as long term investments.”


He concluded: “CENTURY 21 expects a few more twists and turns in the Australian market over the short and medium terms.”

For more information about the residential property market in your areas of interest, please feel free to stop by your local CENTURY 21 Real Estate office for expert, clear advice. Additionally, if you would like to speak to a mortgage professional about potential finance options, please contact CENTURY 21 Home Loans.

Posted by Charles Tarbey on 25/06/2012 at 1:54 PM | Categories:


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