Investors need to exercise a degree of caution when presented with arguments favouring one asset class over another, according to property research group Blue Wealth Property.
The warning comes with specific reference to recent claims from a large fund manager that equities was the best performing asset class even after taking into account the effects of the global financial crisis.
In particular, the reported results from the latest survey declared shares performed better as an asset class compared to property, especially after property maintenance costs were accounted for.
"This is preposterous. Year after year, those with vested interests in equity markets are playing down the returns on Australian residential property as an asset class, probably because there is no way for them to cash in on the property market. The reality is that Australian property has consistently provided investors with superior and far more stable returns than equities," Blue Wealth Property chief executive Tony Hayek said.
The survey in question was conducted by BT Financial Group and used a sample size of 1000 participants. Hayek pointed out that despite the fund manager's claims that equities was still the best asset class, 70 per cent of respondents to the study said they thought property was the best performing asset over the past 20 years.
Moreover, according to Hayek, only 22 per cent of participants nominated shares as the premier performing asset class over this period.
"With small amounts of leverage, the risk-adjusted returns from property have more than doubled the returns on shares in the last decade, even after costs associated with the property have been accounted for," he said.
"The Australian tax system has been built to support property investors more so than any other asset class. If due diligence is taken and investors have a good strategy in place, property will continue to be the most powerful wealth creation tool available to Australians."
