The Property vs Equities Debate

By Chuin Ting Weber, CFP®, CFA, CAIA

Chief Executive Officer and Chief Investment Officer

From time to time, when there are moves in the property market or in mortgage rates, there will be a debate over whether Singaporeans should have so many of their assets in property.

While I support the call to encourage Singaporeans to look beyond property, I prefer not to frame this as a simple choice between property and equities.

Unlike equities, housing is not a pure financial asset. It is a consumption good that fulfils a continuous need: for shelter, stability, and family. Financially, owning your home is the most effective way of managing housing costs. It locks in your costs and protects you from rental inflation.

Buying the best home you can afford is thus a reasonable approach. Counter-intuitively, if you “under-buy” and upgrade later, housing can become less affordable, as the monthly mortgage rises sharply with a shorter remaining tenure.

What constitutes affordability? Not what you can stretch to buy, but what you can sustainably pay.

That means a healthy debt servicing ratio, plus a buffer for income loss or interest rate spikes. HDB’s 30% mortgage servicing ratio^[1] is a good rule of thumb.

At the same time, do not overextend. Ultimately, you cannot eat the bricks when you retire.

Property builds wealth through local growth, leverage, and a structure that works with human psychology and prevailing systems.

Global equities, by contrast, offer diversification and exposure to global productivity. But they require discipline, and, sometimes, a willingness to go against the grain.

For a more robust comparison, we should consider levered property returns, not just price growth. The gap to global equities may be narrower than headline return numbers might suggest. And just as property can experience weak or negative five- or ten-year periods, the same is true of equities.

The crux is this: people can stay invested in property.

They put in cash every month, largely ignore price fluctuations, and hold for the long term. This is supported by both psychology and system design.

Global equities can outperform, but only if we can invest in them with the same discipline as we do with property (minus the leverage).

In practice, our behaviour often works against us. As President Tharman Shanmugaratnam noted in his Miriam Pozen Lecture on 9 December 2025^[2], “left to their own investment decisions, ordinary people often underperform the simple market indices over time.”

Even professional fund managers struggle to beat the market consistently. Costs and layers of fees charged by advisory and distribution platforms further erode returns, though low-cost, market-following and diversified options are now more accessible.

It is fair to say that Singaporeans have achieved more secure retirement outcomes over the past decades through a combination of housing policy and CPF — systems that enforce long-term saving and compounding — than if individuals had been left entirely to their own devices.

Own your home as a place to live and as a hedge against housing inflation. Treat property as a reasonable, but not singular, investment. Recognise that it is a concentrated, localised risk.

And learn to invest in global markets well. It is one of the most democratised ways of building wealth. This is increasingly accessible without a large upfront outlay.

Looking ahead, HDB price appreciation may moderate for structural and policy reasons. Any forecast on private property is just that — a forecast, subject to demographics, markets, financial conditions and government policy. Thus, the call for greater investment literacy and participation in global human enterprise is not misplaced. If there is a property windfall, treat it as a bonus, not a plan.

Ultimately, good financial planning is not about predicting which asset will deliver the highest return. 

It is about managing our money in a way that supports our life goals, sustainably and without distress. There is more to human flourishing than financial wealth.

For most people, sufficiency beats maximisation — and being reasonable beats being purely rational.

Disclaimer: While every reasonable care is taken to ensure the accuracy of information provided, no responsibility can be accepted for any loss or inconvenience caused by any error or omission. The information and opinions expressed herein are made in good faith and are based on sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy, completeness or correctness. All investments carry risk. Expressions of opinions or estimates should neither be relied upon nor used in any way as indication of the future performance of any financial products, as prices of assets and currencies may go down as well as up and past performance should not be taken as indication of future performance. The author and publisher shall have no liability for any loss or expense whatsoever relating to investment decisions made by the reader.

This publication has not been reviewed by the Monetary Authority of Singapore.