The report, formerly the Towers Perrin report, revealed that listed property provided after-tax returns of between 12.3% and 10.0% per annum (depending on income bracket), Australian shares returned between 11.6% and 9.2% per annum over the same period. Residential investment property returned between 10.6% and 8.4% per annum.
Commissioned by the Australian Stock Exchange, the report measures the pre and post tax returns on Australian shares, listed property trusts, residential investment property, fixed interest and cash over 10 years from 1 January 1995 to 31 December 2004. This takes into account key investment factors such as dividend yield, brokerage and dividend imputation for Australian equities, and median property prices, average net rental and vacancy rates, maintenance and repairs and stamp duty for residential property.
Last year, the report found that residential investment property outperformed all other examined investments. This followed a well documented upswing in the housing market. Likewise, listed investments experienced a strong run from 1995 – 2000 when the All Ordinaries Index rose by 66.84% and again from 2003 to 2005 (36.2% increase).
Colin Scully, ASX Deputy Chief Executive Officer said; “This report is a useful tool for all participants in Australian capital markets. We understand it to be the only one of its kind and we are pleased to partner with an organisation such as the Russell Group, to make this available for market participants. Of course, all markets are prone to volatility, but this report illustrates that diversification and perseverance are necessary for riding out the inevitable rises and falls of all markets.”
The report, conducted by independent analysts, Russell Investment Group, says; “Real returns have been particularly strong for residential investment property, listed property trust investments and Australian shares over this period”.
Russell Investment Group also analysed the return of different investments over a 20-year period, from 1 January 1985 to 31 December 2004. Australian shares, residential investment property, listed property and fixed interest all produced after-tax returns well in excess of the average rate of inflation, which was 4% over this period.
Click here to download the ASX Investments Report.
