Note to avoid more confusion: This article does not argue buying a house right now is a better decision than buying shares, or vice versa. It explores why people have tended to do very well buying their own property versus their poor attempts at stock market investing, and what we might learn from that.

About once a month I have an argument with someone – usually my girlfriend – about whether houses are a better investments than shares.

Faith in property is almost irrationally strong. For instance, I happened to watch a BBC documentary on the Spanish real estate crash with a living, breathing Spaniard the other day.

After she’d chortled her way through this tale of a property boom built on over-lending, over-construction, and over-confidence that prices would only go up, she said London was different because: “prices will always go up”.

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