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Residential property Australia'...

Residential property Australia's best-performing asset class of last ten years

Residential property investors in Australia are the businesspeople likely to have made the most money over the past ten years after this was named the country's best-performing asset class of the last decade.

The 2017 Russell Investments/ASX Long-Term Investing Report looks at which types of asset have performed most strongly for Australian investors since 2007, finding that residential property had been the safest and most lucrative market to invest money in.

The best-performing asset class is calculated as the one that has generated the greatest income for investors and the one that has seen the biggest upward change in original investment value.

On average, residential property investments were found to have generated an annual compound return of 8.1 per cent over the past ten years, although this is likely to have been significantly higher in markets such as Sydney and Melbourne.

Shares are also a popular investment choice, but these were only the fifth-best-performing asset class of the past decade, generating an average annual compound return of 4.3 per cent. During the peak of the financial crisis from 2007 to 2009, however, the value of shares fell by 55 per cent, so this data demonstrates a healthy recovery for the asset class.

Global shares faired slightly better overall over the last ten years, producing an average annual return on investment of 5.5 per cent.

Australian bonds fared even better (6.1 per cent), as did global bonds (7.4 per cent).

Tim Cook, director of Russell Investments, commented: "In an investing environment facing lower returns, slower growth and overvalued markets, we believe investors need access to a wider and deeper set of alternative investment strategies to reduce their reliance on traditional return drivers. Otherwise, many will be unable to grow their assets sufficiently to meet their retirement or wealth-oriented goals."

All information provided is of a general nature only and does not take into account your personal financial circumstances or objectives. Before making a decision on the basis of this material, you need to consider, with or without the assistance of a financial adviser, whether the material is appropriate in light of your individual needs and circumstances. This information does not constitute a recommendation to invest in or take out any of the products or services provided by SMATS Services (Australia) Pty Ltd or Australasian Taxation Services Pty Ltd.

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