Buying a house for next to nothing by today's standards in the 1970s has worked out well for John Robertson - today, after subdivision, his two Auckland properties have a combined value of $1.46 million.
The 71-year-old, now retired and living in Papamoa, is convinced property investment is the best way to go.
"If I had put my money in the bank and rented for 40 years, I doubt that I would have had a 10 times return on my bank investment," he wrote in a letter to the Herald.
The Weekend Herald decided to put his claims to the test and compare how the money he invested in property would have performed in the bank or in the New Zealand sharemarket over the same period.
We asked Michael Chamberlain, director of financial service provider SuperLife, to make the comparisons, which include the cost of renting for a non-home owner but exclude mortgage costs, as interest repayments would be roughly the same for any investor using the same amount of borrowed money.
In 1972, Mr Robertson spent $11,500 on a 1930s two-bedroom bungalow in Three Kings.
Over the next 22 years, he spent about $130,000 on the property.
He added a third bedroom and modernised the house in 1983, then in 1993 he cross-leased the property to build a second three-bedroom house at the back.
He did much of the work himself and the recently released council capital value for the two houses combined is $1.46 million.
Mr Chamberlain said property investment and development had been lucrative for Mr Robertson.
The value of the original investment of $11,500, plus renovations and construction costs, would be $368,038 in today's dollars.
In comparison, an investment of the same amount of money into shares would have returned a greater profit ($1,672,358), but having to rent a home would mean that profit would be reduced to only $749,028.
If the money had been left in the bank, Mr Robertson's investment would have decreased in value after paying tax and rent, and he would now be left with only $81,588.
"This would have been a poor investment," said Mr Chamberlain.
"While initially bank interest rates were relatively high, in recent years they have been low, so after tax they are insufficient to pay the rent and the residual capital has reduced."
Bob Hargreaves, Emeritus Professor in property studies at Massey University, said the example of Mr Robertson's property was not a typical scenario for a home owner. "We have a great property outcome set against average returns for the bank deposit and share market options."
Professor Hargreaves said an advocate for shares would argue smart trading on the international market would show better returns than used in this study, using the example of a ground-floor investor in Apple.
The professor said there was also no mention of the risk versus return trade-off.
"Subdividing and renting has risks such as vacancy [and] bad tenants."
Property developer Olly Newland said the results of Mr Chamberlain's scenarios spoke for themselves.
"Having said that, I wouldn't suggest that anyone put all their money into bricks and mortar. They should spread it around a little bit."
Institute of Economic Research principal economist Shamubeel Eaqub said housing had been a spectacular investment over the past 20 years and had beaten most other investments hands down. But he said the period had been an exception, not the norm.
"No investment is a one-way bet. The experience of the provinces over the past seven years shows that is not always the case. While house prices in Auckland are up 37 per cent from the previous peak in 2007, Wanganui is down 19 per cent, according to QV," Mr Eaqub said.
"Timing can matter a lot for investments. But for long-term investors, a diversified portfolio is a better bet than literally betting the house on one asset."