Investment property and shares are both ways to invest money over time, but they work very differently as purchases and as things you hold. Property is one asset, usually bought with a loan and sold through a sale process; shares are parts of companies or funds bought through a broker, often in smaller amounts, and can usually be sold whenever the market is open. Comparing them properly means comparing how each is bought, held and sold, not comparing past returns.
| What to compare | Investment property | Shares |
|---|---|---|
| Entry costs | Stamp duty, conveyancing, often inspections | Brokerage, and any account fees your broker charges |
| Minimum amount | The full price, usually six figures, paid in cash or with a deposit and a loan | The price of one share, or a small parcel |
| Time to buy | Weeks, from offer or auction to settlement | Minutes to days |
| Time to sell | Weeks to months, including marketing and settlement | Minutes to days, when the market is open |
| Diversification in one purchase | One property, one location | One company, or many through a fund |
| Borrowing | A property loan secured against the property | Margin lending secured against the portfolio |
| Income | Rent, less running costs and any vacancy | Dividends, which can vary or stop |
| Ongoing effort | Tenants, maintenance, insurance, rates | Largely passive once bought |
How each is bought and sold
A property purchase adds a set of transaction costs to the price: stamp duty (a state tax worked out on a scale that differs by state, with concessions and surcharges that depend on the buyer and how the property will be used), conveyancing or legal fees, and often a building and pest inspection. Finance usually adds its own timeline too. From an accepted offer or a winning auction bid, settlement is typically weeks away, and selling later means its own marketing period, contract and settlement.
A share purchase adds brokerage, the fee your broker charges to place the trade, and sometimes a separate account fee. There is no deposit or loan needed to buy shares outright, and a trade placed while the market is open typically completes in minutes, with settlement following a short time later. Selling works the same way in reverse.
Insurance is worth planning for on the property side: cover generally needs to start from whichever point the contract makes you responsible for the property, which is not always the moment you exchange contracts and differs by state and by contract, so check the contract and your insurer directly. Shares have nothing physical to insure, though what you hold still moves in value with the market.
Liquidity: how quickly you can get your money out
Liquidity is how quickly an asset converts to cash without a forced discount. Shares bought on a public exchange are generally liquid: while the market is open you can typically sell and expect settlement within a few days. Property is far less liquid. Selling usually means preparing the property, running a marketing campaign, negotiating a sale and waiting for settlement, a process that commonly takes weeks to months.
This matters most if your circumstances could change. Money held in shares is generally easier to access at short notice; money held in property is harder to convert quickly, and a rushed sale can affect the outcome you get.
Diversification and concentration
Buying one investment property puts a meaningful sum into a single asset in a single location, exposed to whatever affects that property and that area specifically: its condition, its tenant, local supply. Buying shares can spread the same sum further. A single trade in a fund can hold parts of many companies across different industries, and buying shares in several companies divides your money across more than one business.
This is a structural difference, not a verdict on either one. One property concentrates your money; a diversified share purchase spreads it. How much concentration or spread suits you depends on the rest of what you own.
Borrowing against each one
Both property and shares can be bought partly with borrowed money, an approach often called gearing, and both use the asset itself as security, though the mechanics differ. A property loan is usually a long term loan secured against the property, with a lender assessing the property and your finances before approving it. If you borrow a high share of the purchase price, a lender may also require lenders mortgage insurance; lenders commonly charge this when the deposit is under 20% of the property's value, though this varies by lender.
Margin lending against shares works differently: the loan is secured against the portfolio, and if its value falls, the lender can make a margin call, asking you to add cash or sell shares to bring the loan back within its limit, sometimes on short notice.
Borrowing magnifies the result either way. Measured against your own money, gains and losses are larger than if you had used cash alone, because you still repay the full loan regardless of how the asset performs. Confirm any borrowing, and exactly what a lender requires, directly with your lender.
Income, running costs and effort
An investment property can produce rental income, but what you receive is rent less running costs: council rates, insurance, repairs, any property manager's fee, and periods when the property sits vacant between tenants. If the property is a unit, townhouse or on a community title, you will usually also pay strata or body corporate fees; some standalone houses sit within a community title scheme too, so check the title rather than assuming from the property type alone. Owning a rental property also brings ongoing obligations to tenants under your state's residential tenancy laws, whether you manage this yourself or pay an agent to do it.
Shares can pay dividends, a share of company profits, though dividends can vary or stop. Once bought, a share holding needs little ongoing action from you, though its value still moves with the market and each company's own performance. Both forms of income can have tax consequences that can change over time, so check the current rules with the ATO or a registered tax agent rather than relying on what applied last year.
A worked example: comparing entry costs
The arithmetic below uses illustrative placeholder figures only, not real rates or quotes, to show how entry costs behave structurally. Real stamp duty is worked out from your own state's duty scale, and real brokerage is set by your own broker, so check both directly before relying on any number.
Example: a $600,000 investment property, placeholder figures only.
- Stamp duty, placeholder: $22,000
- Conveyancing and title search, placeholder: $1,800
- Building and pest inspection, placeholder: $600
- Illustrative total: $24,400, before loan establishment fees or any lenders mortgage insurance, which depend on your own loan and lender
Example: $120,000 of shares, placeholder brokerage rate only.
- Brokerage, placeholder at 0.1%: $120
- Illustrative total: $120, before any account fees your broker charges separately
These are not equivalent portfolios, just two round sums used to show the same point: in this illustration, entry costs are a larger share of the amount invested for the property purchase than for the share purchase, mostly because of stamp duty. Your own figures, on your own state, lender, broker and property, could differ from this example in either direction.
With real figures instead of placeholders, some questions worth working through:
- What would total entry costs actually be on this property, using your state revenue office's duty scale and a real conveyancing quote?
- What would brokerage and any account fees cost with the broker you are considering?
- How quickly might you need to access this money if your circumstances changed?
- How much of your overall wealth would sit in this one property or this one share parcel?
- What tax consequences could apply, and have you checked them with the ATO or a registered tax agent?
None of this tells you which mix of property and shares suits you. That depends on your own circumstances, goals and the rest of what you own, none of which this article can see. If you want advice on your personal situation, that is a job for a licensed financial adviser, not general information like this.
Where Virtual Buyers Agent fits
Virtual Buyers Agent is built for people who have already decided to look at property and want to work through a specific one. It models a single property using the figures and assumptions you enter, and shows the arithmetic behind each one. It does not compare property with shares or any other asset class, and it does not give financial advice.
If you are working out entry costs on a specific property, the stamp duty calculator can help with that part of the sum.
For official guidance, see Moneysmart and its guide to financial advice. If you get personal advice, check the adviser on ASIC's Financial Advisers Register.
Reviewed 28 September 2026.