FY24 was the second consecutive year that shares vs. property delivered incredibly similar total returns.
S&P/ASX 200 Index (ASX: XJO) shares rose 7.83%, for total returns of 12.1% including dividends.
Meantime, the national median property value, which reflects all types of property in a single data point, rose by 8% with total returns of 12.2% after rental income is factored in, according to CoreLogic data.
But a combination of the two in the form of ASX property exchange-traded funds (ETFs) delivered far greater returns in FY24.
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Shares vs. property: 2 ASX property ETFs outperform
There are three Australian property ETFs and three global property ETFs listed on the ASX.
The ASX recently published total returns data for all ASX shares, ASX ETFs, listed managed funds and listed investment companies (LICs) in FY24.
The two top-performing ASX property ETFs simply smashed it out of the park with above 20% gains.
SPDR S&P/ASX 200 Listed Property (ASX: SLF)
This ASX property ETF delivered total returns of 24.35% in FY24.
The SLF ETF tracks the returns of the S&P/ASX 200 A-REIT Index (ASX: XPJ) before fees and expenses.
State Street says the ETF is a low-cost way of investing in ASX property shares. The management expense ratio (MER) was 0.4% in FY24 (reduced to 0.16% from 1 July 2024).
The SLF ETF exposes investors to all types of global property, including retail, office, industrial and diversified. Its biggest position today is Goodman Group (ASX: GMG) at 39.98%.
Goodman was the best-performing stock in its market sector in FY24, with an astounding 73.1% share price gain. This was largely due to the excitement surrounding artificial intelligence (AI), with Goodman leveraging its industrial property expertise to build, convert, and acquire more data centres worldwide.
The ETF's second-biggest position today is Scentre Group (ASX: SCG) shares, with an 11.66% holding. The Scentre share price rose by 17.74% in FY24 as the company benefitted from several retail sector tailwinds.
Goodman and Scentre shares make up about half the value of the SLF ETF.
Their share price gains of 73.1% and 17.74%, respectively, help explain why the SLF ETF delivered better total returns at 24.35% vs. physical residential property, which delivered 12.2% total returns.
Vanguard Australian Property Securities Index ETF (ASX: VAP)
This ASX property ETF delivered total returns of 23.44% in FY24 — only slightly less than the SLF ETF.
The main difference between the two ASX ETFs is the VAP ETF tracks the return of the S&P/ASX 300 A-REIT Index before fees, costs and taxes. So, it incorporates the performance of 100 more ASX property shares and REITs than the SLF ETF. The MER is 0.23%.
Today, the VAP ETF's biggest holdings are the same as the SLF ETF, with Goodman shares representing 39.66% and Scentre shares 10.7%.
Here's how the other 4 ASX property ETFs did in FY24
- The VanEck Australian Property ETF (ASX: MVA) delivered 7.31% total returns
- The SPDR Dow Jones Global Real Estate ESG ETF (ASX: DJRE) delivered 4.66% total returns
- The iShares Core FTSE Global Property Ex Au (AUDH) ETF (ASX: GLPR) delivered 4.12% total returns
- The VanEck FTSE International Property (Hedged) ETF (ASX: REIT) delivered 2.35% total returns.
Here's how home values across Australia changed in FY24
Here is a further breakdown of how home values changed across the city and regions in FY24.
A key factor in the performance variance is the strongest markets had tight supply and demand. The impact of this was so significant that it trumped the usual dampening effect of higher interest rates.
| Property market | Capital growth in FY24 (all homes) |
| Perth | 23.6% |
| Regional Western Australia | 16.6% |
| Brisbane | 15.8% |
| Adelaide | 15.4% |
| Regional Queensland | 12.2% |
| Regional South Australia | 11.3% |
| National | 8% |
| Sydney | 6.3% |
| Regional New South Wales | 4.1% |
| Darwin | 2.4% |
| Canberra | 2.2% |
| Melbourne | 1.3% |
| Regional Tasmania | 0.7% |
| Hobart | (0.1%) |
| Regional Victoria | (0.5%) |
Foolish takeaway on shares vs. property
Choosing between shares vs. property is a classic investor's dilemma. If you have enough time on your side, many people would say you should simply buy both.
Could ASX property ETFs be another way of doing so? In a way, yes.
But it's worth noting that very few ASX property shares or REITs have direct exposure to the residential market. And you obviously can't live in them or add value to them through renovations.
So, if you want exposure to the residential market, you'll have to go 'old school' and buy a bricks-and-mortar investment.
