13 December 2010 - National investment property research group Blue Wealth Property are urging consumers who are considering long-term wealth creation and retirement income ambitions to conduct their own extensive research and to remain vigilant when seeking advice from independent advisory groups.
The calls come following reports last week from BT Financial Group, claiming investing in shares was the “strongest performer out of a group of best performing assets, despite the falls associated with the global financial crisis’ and ‘particularly when property maintenance costs were factored in,” a view Blue Wealth Property CEO, Dr Tony Hayek finds critically flawed and biased.
The results of an independent survey of 1000 people conducted by BT revealed seven out of ten investors surveyed believed property was the best performing asset of the past two decades while just 22 per cent chose shares.
However, BT investment specialist Michael Bailey suggested while most investors believe property outperforms shares in terms of investment returns, they should in fact, “be satisfied with more easily attained market returns”.
“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,” said Dr Hayek.
According to Dr Hayek, the key strategy to wealth creation through investment is to invest regularly over a long-term to reduce any short-term risks.
“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,” said Dr Hayek.
“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.”
The Russell Report investigates the performance of various types of investments over the past 10 and 20 years. As part of the performance comparison, the report considers the real-life impact of tax, costs and borrowing on ultimate investment returns.
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