$100,000 can buy you a slice of thousands of businesses around the world this afternoon. Or it can be the deposit on a $400,000 property, with the bank lending the rest, tenants paying rent and leverage doing the heavy lifting.
Most Australians assume property has to win. But what if prices stall? What if it's the home you live in? I ran a proper 10-year, side-by-side comparison to find out. Tap any button to jump to that part of the video.
As a default, ETFs come out ahead of an investment property in this model unless the property grows by more than about 4.5–5.3% a year, depending on what ETFs return. For your own home it’s closer: buying wins above roughly 4.7% growth a year if you stay 10+ years and can comfortably afford it.
Why property looks unbeatable: leverage
Property has made many Australians rich, largely because of leverage. An $80,000 deposit plus about $20,000 in buying costs can control a $400,000 asset. Mortgages give ordinary Australians access to long-term borrowing that's rarely available for shares.
Property doesn't win because houses grow faster dollar for dollar. Debt magnifies the result in both directions. Property also brings interest, rates, insurance, maintenance and vacancies. Forced repayments can build discipline, but only if your income lets you hold on through the bad years.
140 years of Australian property
After inflation, Australian house prices were broadly flat from 1881 until the end of World War II. The lasting rise came later, especially from the late 20th century, as finance became easier, incomes and population grew and supply struggled to keep up. Credit was central: most buyers bid what the bank will lend them.
By 2026, the gap between the median home price and what an average full-time earner could afford (20% deposit, repayments capped at 28% of income) had reached almost $400,000. That doesn't mean prices must crash. Dual incomes, equity, cash buyers and family help all matter. But future growth can't rely on borrowing power expanding forever.
ETFs vs property over different time periods
- US shares returned around 15–16% a year over the past 5 and 10 years; Australian shares around 7–9% including dividends.
- Australian dwelling values rose 382% in the 30 years to July 2022, about 5.4% a year in price growth, before rent and costs.
- Long-term global research found housing and shares both returned about 7% a year after inflation from 1870 to 2015, with shares ahead by about 2 points a year after 1950.
The real problem with comparing them
One ETF can own hundreds or thousands of businesses across industries and countries. One investment property is one building, in one suburb, in one rental market, possibly with one difficult tenant. Being familiar isn't the same as being diversified.
Behaviour matters too. An ETF's price updates every day, which can tempt nervous investors to panic-sell. Property is harder to sell, which can stop emotional decisions, but can also trap you when you need the cash.
Building the model
Both investors start with the same money, add the same extra money and hold for 10 years. After 10 years about $271,000 is still owing on the mortgage.
The result
For context, Vanguard's current 10-year forecasts are about 4.6–6.9% a year for Australian shares and 5–7% for unhedged global shares, so the 8% scenario is above both. Even so, both ETF scenarios beat property growing at 4%. At 5% property growth, property beats a 6% ETF but still trails an 8% ETF.
ETFs don't win every scenario, but they're the stronger default. Property needs higher growth, a better yield or a way to add value to make up for financing costs, concentration and extra work. These results are before personal tax: deductions, carried-forward losses and capital gains tax can all change the outcome.
Then there's your time: approving repairs, reviewing statements, insurance, rates, strata, vacancies and tax records. An ETF can be automated and largely left alone.
When it’s your own home
Now the question becomes buying a home vs renting and investing the difference. At a 3.8% yield, renting an equivalent $400,000 home costs about $15,200 in the first year. The renter invests the $100,000 and tops up whenever owning costs more, again about $114,000 over 10 years. Before tax, the result is almost the same: the home needs about 5.3% growth to match an 8% ETF.
Tax lowers the hurdle, because your main residence is generally exempt from capital gains tax while ETF income and gains can be taxed. In a simplified example (30% tax rate; 8% ETF return as 5% growth plus 3% income; 3% inflation; both sold after 10 years), the ETF finishes at about $346,000 instead of $385,000, and the home's break-even growth falls to about 4.7% a year.
So if you'll stay at least 10 years, can comfortably afford the repayments and the home grows around 5% a year, buying is likely to win. Below about 4.7%, renting and investing wins under these assumptions. Your tax rate, franking credits and first-home concessions can all move the result.
The warning from Canada and New Zealand
Property doesn't need to crash for ETFs to win. It only needs to stop delivering easy, broad-based growth.
- New Zealand: prices rose about 40% in the pandemic, and are still around 15% below their November 2021 peak (about 28% after inflation).
- Canada: home values are around 20% below their February 2022 peak.
- Australia: national values fell 0.9% in August 2026, a fifth straight monthly fall, leaving them 3.6% below the March peak. In September 2025 the median dwelling cost about 8.2× median household income, a record, and a new mortgage needed about 45% of median pre-tax household income.
Investor support is also becoming less generous. Under changes announced in the 2026 Budget, from July 2027 buyers of established investment properties bought after the Budget generally can't offset rental losses against their wages, though losses can be carried forward against future rental income or capital gains.
None of this proves Australian property has peaked. Population growth and a housing shortage could keep supporting prices. But the easy-money era, when expanding credit lifted almost every property, is probably behind us. If prices grow only 0–3% while owners keep paying interest and costs, ETFs don't need spectacular returns to win. They just need to keep compounding.
The verdict
Are ETFs usually better than an investment property? As a default, yes. In this model, property needs about 4.5% growth a year to match a 6% ETF, or 5.3% to match an 8% ETF. Some properties will clear those hurdles. But unless you have a good reason to expect stronger growth, a better yield or a way to add value, ETFs give a competitive result without one large mortgage concentrated in one building and one local market.
Your own home is different. Under the 8% ETF and tax assumptions, buying starts to win at about 4.7% growth a year. Below that, or if you might move soon and can rent cheaply, renting and investing wins in this model.
Wondering how much you'll need to retire? Read How much do you need to retire in Australia?
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General information only. This is a simplified model based on stated assumptions, not a forecast or a recommendation to buy, sell or rent property or invest in ETFs. It doesn’t consider your objectives, financial situation, tax position or needs. Property and tax rules change. Get personal financial, tax and lending advice before making property or investment decisions.
Frequently asked questions
Are ETFs better than investment property in Australia?
As a default, often yes. In a 10-year model with a $100,000 start, an investment property needed about 4.5% annual price growth to match ETFs returning 6%, or 5.3% to match ETFs returning 8%. Properties with stronger growth, better yields or added value can still win.
Is it better to buy a home or rent and invest?
It depends on price growth, how long you stay and tax. In a simplified model, buying a home you live in started to win at about 4.7% annual price growth if held for 10 years; below that, renting and investing came out ahead.
Why does property seem to beat shares?
Mostly leverage. A $100,000 deposit can control a $400,000 property, so gains (and losses) are magnified about four times. House price figures also usually exclude costs, while share returns include dividends.