The Investor 6 June 2006
Bigger and better houses distort numbers. Readers keep sending in thought-provoking letters about the shares v rental property debate. It’s central to the question of how to invest long-term savings, so it’s worth continuing to explore the issues. Today, excerpts from two letters: “Your reader who commented on comparisons between housing price indexes and share market indexes has overlooked many points. Sometimes very large amounts are spent on home improvements without being considered when calculating house price increases. “With new houses, a trend for larger houses and obviously the higher cost for more square feet will also distort the figures to indicate asset value growth where there is none.