As a recently arrived migrant (three years now) and a qualified accountant, I am perplexed to see the Australian obsession with real estate (notwithstanding the irony that despite being a continent with so much land, there exists a housing crisis), and virtually no discussion on equity/managed funds on prime-time television or from the government. Time and again, it has been proven that the best asset class over a long period is equities. The Buffetts and Vanguards of the world became rich investing in businesses.
Even in developing countries such as India, the government encourages investment through mutual funds that yield high double-digit returns. These investments in managed funds (equity linked) with a lock-in period of three years lower tax liability in the year of investment, and the gains are tax free when sold.
No other asset class gives you the return of equities over the long term. Stocks are not everyone’s cup of tea and are perceived as risky but if one looks at super funds (which essentially make equity investments), the returns are not bad. In a well-regulated market such as Australia, where corporate governance and reporting standards are decent (try China!), the apparent risks are low.
Perhaps it’s time we changed the narrative and encouraged ordinary people to invest in the markets, rather than keep chasing real estate. And the government should encourage this!