“Listed Property" versus "Direct Property" - an historical perspective and comparison

This article is one of a series of SuperMail articles by Colin Grenfell, who is a superannuation consultant and actuary and Associate Director of SuperEasy.

Each article compares the long term performance of two investment sectors, such as Australian Shares, International Shares, Listed Property or Fixed Interest, or financial indicators, such as the Consumer Price Index (CPI), Average Weekly Ordinary Time Earnings (AWOTE), 90 day Bank Bill Rates or 10 year Bond Rates.


This article compares the investment performance of Listed Property securities with that of diversified portfolios of Direct Properties, over the 40 years from 30 June 1977 (this being the time when suitable data first became available for Listed Property) to 30 June 2017. The article is an update of a similar article published just over eleven years ago. The previous article examined the 29 year period from 1977 to 2006. First, let's examine what happened if $10,000 was invested in each of these two sectors at the start of the 40 year period, assuming that all dividend and rental income was reinvested back in each portfolio, as occurs with some managed investments.


The following chart plots the results for the 40 year period. To show the relative sizes of the accumulated results for each portfolio, a logarithmic scale has been used. The ratio of the Listed Property results as a percentage of the Direct Property results is also shown.




The next table summarises the results:



   $10,000 invested for 40 years


Listed Property


Direct Propery



from 30/6/1977 to 30/6/2017:




























   Accumulated to 




























   Average annual

1st 12 yrs 

















   compound return

2nd 12 yrs 

















   (before tax

last 16 yrs 







    and fees)



















40 yrs 



























   Standard deviation*

40 yrs 

















                                                  Source: Austmod historical returns before tax and fees 

* The "standard deviation" indicates, for normally distributed investment returns, that approximately:

(a) one-sixth of annual returns are less than (average - standard deviation)

(b) two-thirds are in the range (average - standard deviation) to (average + standard deviation)

(c) one-sixth of annual returns are more than (average + standard deviation).


The year-by-year investment returns for each year ending 30 June have been:


The annual returns for Listed Property were negative 5 times in the 40 years. The annual returns for Direct Propert were negative 4 times in the 40 years. However the year-by-year performance of each of these two sectors has usually been quite different. This may be due, at least in part, to Direct Property being less likly to be geared, less liquid and fully revalued less frequently.

In 28 of the 40 years the return for Listed Property exceeded that for Direct Property.

To give an indication of the trends in investment returns (and in inflation) over the period, the next chart plots the ten year moving average compound returns per annum. The ten year moving average compound rate of inflation per annum, based on changes in the CPI, is also shown.


During the 40 year period, the ten-year returns above have never been negative, apart form an average of -0.1% for Listed Property in the final year. The low Listed property average returns for the periods ending 30 June 2009 to 30 June 2017 reflect the impact of the Global Financial Crisis. During these years, the ten-year Listed Property average returns have usually been less than the rate of inflation.

Disclaimer: This article is intended to be a factual analysis of past investment returns. It is not intended, nor is it to be regarded, as investment/securities advice. It does not take into account whether any particular investment or type of investment is suitable for your individual circumstances. It is strongly recommended that you seek professional advice before making any investment choice or decision.