Aussies have turned their backs on property in favour of these investments

Property has had a rough time of it during the COVID-19 pandemic, with many investors turning to other asset classes. But housing affordability is the best it's been in 18 years, and growth is on the way.

The dream of owning your own home used to define many Aussies' foray into the world of investing.

That's no longer the case, with more than a quarter of Aussies turning to the share market.

A Finder survey of more than 1000 respondents found that 27% of Australians invest in shares, 10% in exchange traded funds, 6% in foreign exchanges, 13% in term deposits, while 44% hold cash in savings accounts.

"Australians want to build their fortunes and aren't prepared to rely solely on their income to do it," Kate Browne, personal finance expert at Finder.

"It's a broad spectrum - from those investors who just want to maximise savings to those who are striving for financial freedom."

Fixed income investments are flailing with interest rates plumbing historic lows, so investors are turning elsewhere.

"Low savings interest rates have also driven more people into the share market as they seek to make a profitable return on their investments.

"No matter the goal - it's clear there's interest in a vast array of different investment options - all with different levels of risk and potential returns," Browne said.

However, while low interest rates are pushing Aussies into a range of asset classes in the hunt for yield, it could be a mistake to turn away from property altogether.

Betashares chief economist David Bassanese says home loan affordability is the best its been in since March 2002, "thanks to the overall decline in house prices relative to household income over the past three years and, perhaps most importantly, the substantial reduction in mortgage rates.".

As at the June quarter, the estimated median national house price was $700,000 while the average after-tax income around $135,000. With the prevailing relevant mortgage rate for new around 2.9%, 26.2% of after-tax income would have to be devoted to meeting mortgage repayments on a 25-year loan, compared with an average since mid-2004 of 32.8%.

"The last time our national mortgage affordability estimate was better than this was in March 2002. In the following two years, national house prices rose 36%."

It's a case of affordability today, growth tomorrow.

"What we know from history is that when mortgage rates drop, new home buyers don't just pocket the savings - they simply bid more for properties as their affordability limit has improved."

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