One of the main benefits of investing in property is that gains aren’t just applied to the principal invested or equity paid into the loan, but the whole sum – borrowed amount included.
It means that Australian property owners have had magnified exposure to an appreciating market without too much risk of a downturn, and as such have had a sizeable advantage over sharemarket investors, for whom borrowing to invest and scoring those magnified gains generally comes with greater risk and, often, expense.
