Whether you’re a first-time investor or someone looking to diversify your financial portfolio, the question of where to invest remains one of the most debated topics. Two of the most popular options in Australia are property and shares, both offering unique advantages and risks. But which path makes the most sense for you in 2025? Let’s break it down.
What Does Investing in Property and Shares Mean in Australia?
Investing in Property
Investing in property involves purchasing real estate (such as houses, apartments, or commercial spaces) either for rental income or capital growth. Property investment in Australia has long been popular thanks to a growing population, housing demand, and tax incentives like negative gearing.
Typical scenarios include renting out a home to generate income and selling it later at a higher price if its value appreciates.
According to CoreLogic, Australian residential property values rose 8.1% nationally in 2023, with Brisbane and Perth seeing growth of over 13%. Over the past 20 years, national house prices have increased by an average of 6.8% per annum, excluding rental income.
Investing in Shares
Investing in shares means purchasing small units of ownership in companies listed on the stock exchange, such as the ASX (Australian Securities Exchange). As a shareholder, you can profit through dividends and capital gains.
Shares allow you to invest across various industries like technology, healthcare, and mining, giving you exposure to local and global markets.
The ASX 200 returned 12.4% in 2023, including dividends. Over the long term, Australian shares have delivered an average annual return of around 9.8% p.a. over the past 30 years, when including reinvested dividends (S&P/ASX data).
Property Investment in 2025
- Tangible Asset – Physical ownership provides a sense of security.
- Steady Rental Income – Demand in cities like Sydney, Melbourne, and Brisbane remains strong.
- Capital Growth – High-demand areas have historically seen solid appreciation.
- Tax Benefits – Negative gearing and CGT discounts are favourable for high-income earners.
Risks
- High Initial Costs – Includes deposit, stamp duty, legal fees, and maintenance.
- Illiquidity – Property is not easily or quickly sold.
- Location Risk – Performance is highly location-dependent.
- Debt Exposure – Higher interest rates increase mortgage pressure.
Shares Investment in 2025
Benefits
- Lower Entry Point – Start investing with minimal capital.
- Diversification – Spread your risk across industries and markets.
- Liquidity – Shares can be bought or sold quickly.
- Passive Income – Dividends provide cash flow with less upkeep.
Risks
- Volatility – Markets can fluctuate significantly in the short term.
- Complexity – Requires understanding financial markets.
- No Guarantees – Returns are not assured.
- Emotional Investing – Market swings can lead to impulsive decisions.
Key Considerations for 2025
Economic and Real Estate Trends in Australia
- Population growth is driving long-term demand for housing, but volatility in interest rates may temper short-term enthusiasm.
- Share markets are gaining strength in sectors such as healthcare, mining, and renewable energy, with strong dividend performance expected to continue.
Your Financial Goals
- Property may suit those with long-term outlooks, higher capital, and a preference for tangible assets.
- Shares may appeal to those seeking flexibility, growth, and a lower barrier to entry.
Lifestyle and Risk Tolerance
- Property investors must manage long-term debt, maintenance, and lower liquidity.
- Share investors should prepare for short-term volatility and develop a long-term view.
Making the Right Choice in 2025
Investing is not one-size-fits-all. The best strategy depends on your capital, goals, and tolerance for risk.
Consider the following:
- How much can you invest upfront?
- Are you comfortable with price fluctuations?
- Do you need access to funds quickly?
- Are you ready to manage property or learn the share market?
Many Australians choose a hybrid approach, combining the stability of property with the diversification and liquidity of shares.
Final Thoughts
Both property and shares have strong historical performance in Australia. Property has delivered consistent long-term growth, especially in key cities, while shares have historically outperformed over the long term when dividends are reinvested.
Understanding your objectives is key. Whether you’re building wealth, generating income, or planning for retirement, your investment strategy should align with your personal circumstances.
If you’re unsure which path is right for you, click here to organise a complimentary 20-minute phone call with an EPG Wealth adviser to help you make an informed decision and create a strategy tailored to your goals.