What experts say about the gold versus property debate

The white picket fence has long been viewed as one of the best investments on the market by Australians.

But with gold prices on the rise and property prices mellowing, questions are being raised about where the best returns can be had.

Golden ticket

It's well understood that investing in gold amid economic turmoil provides shelter from the ups and downs of financial markets. But will gold provide investors with better returns than real estate?

Gold returned a solid performance over the last year, rising in value by 54 per cent between 2024 and 2025, prompting questions about whether gold bullion could be a more solid investment.

As a commodity, the price of gold rises and falls based on supply and demand. Investors can keep track of the price of gold on the World Gold Council website.

Investor and entrepreneur Peter Esho points out that gold has risen about 270 per cent in Australian dollar terms over the past decade.

Meanwhile, the average home has only risen by 75 per cent during the same time frame.

But as Mr Esho points out, most investors don't buy houses with 100 per cent cash, they take a loan from the bank, often only footing 20 per cent of the bill up front.

"If we assume a $100,000 investment in gold 10 years ago and $100,000 into an average Australian house, the capital gain on gold would be worth about $270,000, while the equity on property is worth around $375,000," Mr Esho says.

Property investors could have done even better investing in affluent suburbs in Sydney, while investing in regional areas means you would have come out worse off.

"The point is that investing is about income growth, capital growth, leverage and drawdowns. Sure, gold can be leveraged, but that leverage comes with strict drawdown limitations which can be subject to liquidation on market falls," he says.

Need for housing

It's worth pointing out that Australia is facing a housing shortage, with government targets falling short. This will ultimately push up prices.

<img src="https://cue.wanews.com.au/webservice/thumbnail/article/21533830" id="_7a1b7930-c5e3-4338-af22-70bbbef88993" alt="Not Supplied" caption=""As a fundamental human need, property maintains baseline value even in economic downturns," says Ray White data analyst Atom Tian. Pic: Shutterstock" credit="View">

Ray White data analyst Atom Tian says the growth in gold value over the last year represented a boom when comparing to the same growth that median unit prices achieved over the last decade.

Mr Tian also points out that you can't live under a gold bullion, which points to the intrinsic value of property, which extends far beyond monetary returns.

"As a fundamental human need, property maintains baseline value even in economic downturns. Prices rise and fall based on local demand drivers: employment opportunities, infrastructure, schools and lifestyle factors."

Once you're in the market, it offers stability.

"You can invest $1 million in property without fear it will halve overnight. Additionally, banks will lend 80 to 90 per cent to purchase property, and rental income provides cash flow," Mr Tian says.

And like all investments, what goes up can come down.

Mr Tian says this exceptional year for gold is definitely unusual. Before this recent surge, gold averaged 10 per cent annual growth.