If you'd put $1m into shares vs property at the start of COVID, how much would you have now?

Investors love the shares vs property debate. It can keep a friendly dinner party going for hours on end.

And there are some passionate arguments to be had regarding which asset class is 'best' and why.

If they can, though, smart investors simply do both.

While past performance is no guarantee of future performance, it's interesting to look back over certain periods of time to determine whether shares or property would have been the wisest choice.

Which is better? Shares vs property since COVID

Let's keep this simple and just look at the capital gains since COVID-19 for shares vs property.

That means investment property rents and ASX shares dividends are not included in our calculations here.

Property values

CoreLogic research director Tim Lawless said the national Home Value Index (HVI) surged by 32.5% between March 2020 and February 2024. The HVI incorporates all types of dwellings.

So, if you'd invested $1 million in property at the start of COVID, you'd have $1,325,000 now.

At the start of COVID, property prices initially dipped by 1.7% between March 2020 and June 2020.

They then surged 30.8% higher to a cyclical peak in April 2022. There's been a further 1.7% uplift since then.

Interest rates falling to emergency lows and fixed mortgage rates dropping below 2% by 2022 significantly stoked buyer demand.

People also started upgrading to larger homes to make life more bearable during lockdowns. Many left the inner cities for outskirt areas or the regions because they could work from home and buy cheaper.

This exacerbated demand in hotspots like South-East Queensland. It was one of the most popular locations for interstate migration during COVID, as people sought a seachange lifestyle and larger, cheaper homes.

When interest rates began rising in May 2022, there was a 7.5% slump in median home values.

That's normal — home prices typically fall as interest rates rise. In 2022, the national home value fell 5.3%.

Then two factors turned that trend on its head in early 2023.

Booming migration and low supply of homes for sale amid continuously strong demand led to property price growth of 8.1% in 2023. Incidentally, ASX 200 shares delivered the exact same capital growth.

ASX shares

At the start of COVID, ASX share prices crashed.

The S&P/ASX 200 Index (ASX: XJO) fell 32.5% from peak to trough over a five-week period from mid-February to late March 2020.

Then came the rebound.

ASX 200 stocks came out of that trough to surge about 55% to a cyclical peak in August 2021. 

Then price growth moderated, with the benchmark index rising just 1.1% since then til today.

The ASX 200 hit a new all-time high of 7,853.1 points in intraday trading last Friday, 8 March.

So, if you'd invested $1 million in ASX 200 shares, say via an index fund, on the first day of the COVID market crash (21 February), you'd have $1,104,600 today.

If you'd picked the bottom and invested $1 million on the day of the market crash trough (19 March), you'd have $1,600,000 today.

What a difference a month makes!

ASX 200 blue-chips

What if you'd been more selective with your stocks?

What if you'd put $1 million into an ASX 200 blue-chip stock on the day of the trough?

Let's see what that $1 million would be worth now:

Foolish takeaway

To recap, the ASX shares vs property markets responded differently to the pandemic.

They both fell initially — but to vastly different degrees — and rebounded to varying degrees as well.