Which is the better investment - property or stocks and shares?
Belgarum Estate Agents
property investment, PROPERTY MARKET, Investment Property
As an estate agent, you might expect me to say that property is the better investment by far. Just dive right in! However, I actually believe that it all rather depends on what you mean by an investment.
Call me old-fashioned, but I still cling to the idea that a house or an apartment is first and foremost a home, and not just another means of making a quick buck. Indeed, I would go so far as to say that what our friends in the City might call the commoditisation of property was probably one of the main causes of the last market crash. And here I have to hold up my hand and confess that estate agents were partly to blame - not least by specifically targeting investors on many occasions.
This is all rather ironic, of course, since the figures prove that from a purely money-making point of view, stocks and shares actually perform significantly better than property! A recent report from the Halifax, for instance, pointed out that investing £100,000 in a buy-to-let property in 1989 would have produced a 201% gain, adjusted for inflation, or an annual return of 4.8%. By contrast, the same amount invested in the FTSE 100 over the same period would have produced a return of 653%, or 8.4% a year, assuming you reinvested your dividends to buy more shares.
So, there you have it. If all you’re interested in is making money, the stock market is a better bet than the property market.
But then again... as I said at the beginning, it all rather depends on what you mean by an investment. I would argue that buying a home; somewhere to call your own, to come back to after a hard day at work - maybe even to raise a family in - is arguably the best, most important and most worthwhile investment any of us can make.
One of the, in my view, happier consequences of the property crash has been that people are staying longer in their properties, before moving. In some cases, of course, this may be a source of very real hardship. But to the extent that it makes the rest of us focus on home-making - rather than money-making - it’s no bad thing.
Except for estate agents, of course!
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, Investment Property
, property investment
, PROPERTY MARKET