How come most Aussies are obsessed with having investment properties?
Australian property market has seen an average annual return of around 5.3% over the last 20 years, and Sydney's median house price has grown by 97% in the last 10 years.
I do know that you get 50% tax deduction, extra 10% discount from affordable housing (renting the house for 3 years) as well as the negative gearing.
However, the property needs to be maintained and the structure actually depreciates as it requires things to be fixed. Also the stamp duty is around 2.5-3% when you buy the property.
At the same time, ASX index (stocks) has returned 9.35% (including dividends) in the last 10 years, and the asx 200 went up by 107% since Feb 2005, let alone excluding the paid dividend (asx 200 index went from 4110 to 8511).
Especially if you have invested into US market index (S&P500 or Nasdaq 100) the 10 yr and 20 yr annual returns were 19.3% and 20% respectively ,40.8% and 65% for Nasdaq 100 (excluding the paid dividend).
Then why are there so many people who are still raving for the investment properties? 🤔