Investing in Superannuation versus Property: which one generates better long-term returns


When it comes to investing your hard-earned money, two of the most popular options are investing in superannuation and in property. But which one is better for your long-term financial future?

Superannuation is a retirement savings account that is designed to help you save money for your retirement. Your employer is legally required to contribute to your super, known as the superannuation guarantee or employer contributions and you can also make your own voluntary contributions through salary sacrificing and personal deductable contributions which can reduce your taxable income. You can also make after-tax contributions, known as non-concessional contributions (NCC).

The main benefit of Superannuation relates to the tax benefits, as while in superannuation phase, earnings made in the account are taxed at 15%, whereas earnings made on investments outside super are taxed at your marginal tax rate. Once transitioned into the pension phase, the earnings made in the account are tax free.

Property, on the other hand, involves purchasing real estate, such as a house or an apartment, with the intention of either renting or living in it.


So, which one should you choose?


According to research from Chant West, an investor would have made a higher cumulative return on their super over the past decade if they had invested in the median high-growth option as opposed to the average property returns.

This is because high-growth options are often a better fit for younger investors whose portfolios have time to recover from short-term fluctuations in the market. The median all growth fund return was even higher at 169%.

Chant West defines high growth as an allocation of 81 to 95% in growth assets and the remainder in defensive assets, whereas all growth refers to a 96% to 100% allocation of growth assets.

In comparison, Australian house values rose 84.3% over the past decade, according to CoreLogic figures. Australian unit values managed just a third of super’s return, at 50.4% in 10 years, an important figure for first home buyers considering apartments as an entry-level option.


A comparison of the returns on superannuation versus on property over the past 10 years.


  • High Growth = 157.0%
  • All Growth = 169.0%


  • Houses = 84.3%
  • Units = 50.4%

Source: Chant West and CoreLogic


However, the gap between super and property is significantly smaller for buyers who invested in some of Australia’s most expensive housing markets. Someone who bought a house in Sydney’s northern beaches area a decade ago would have made a median return of 145.9%. The median house value in the area now is almost $2.7 million.

Houses in high demand parts of Sydney, including,

  • Eastern suburbs,
  • Inner west,
  • North Sydney and Hornsby
  • Baulkham Hills and Hawkesbury

are all up at least 130%.

Even the top performing unit markets had lower returns, than the superfunds, with Bendigo units up by 106.9% over the decade, while Geelong, the NSW Central Coast and Illawarra, the Richmond-Tweed region around Byron Bay, Hobart and the Sunshine Coast all rose by at least 89%.



It all really comes down to your financial goals and personal circumstances. If you’re looking for a long-term investment that will provide you with a steady income in retirement, then superannuation is a good option. But if you’re looking for an investment that you can enjoy prior to retirement while also potentially earning a good return, then property may be the way to go.

It is key to understand that superannuation can only be accessed once certain conditions are met, for example, individuals aged 60 or above may be able to access their retirement savings once they retire, whereas individuals under 60 yeas may need to reach preservation age and meet additional conditions. To read more on the specific requirements, click here.

Additionally, it’s important to remember that both super and property carry risks. With super, the value of your investments can vary depending on market conditions. With property, there is always the risk that the property may not appreciate as much as you hoped, or that you may struggle to find tenants if you’re renting it out.


Ultimately, the key to successful investing is to diversify your portfolio. By diversifying your investments, you can reduce your overall risk and potentially earn a better return on your money over the long term.

If you’re not sure which investment option is right for you, it may be a good idea to speak to a financial adviser who can work with you to see which option suits your personal financial position.

If you would like to improve your current investment strategies or are looking to start your investment journey, click here to organise a complimentary 20-minute phone call with an EPG Wealth adviser.

<a href=””>Image by jcomp</a> on Freepik



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