I don't think it really matters what you invest in at the moment as neither property nor the share market has done well over recent times. If you feel you would prefer to invest in property then I would go for the cheaper properties as if the economy continues to spiral downwards you have a smaller exposure, higher chance of being able to rent the property as more people could afford the rent.

I would not worry so much about the negative gearing. I think it is a bit over rated. Negative gearing just means you are making a loss. Can you think of any business that tries to make a loss? Didn't think so.

If you can get 2 properties positively geared you have less to worry about if you ever find your self out of a job or in a lower paid position.

IN addition to that the cheaper the property the more people are able to afford to buy it when you go to sell and often the lower end of the market is slightly more protected from reduced demand because of the first home owners grants etc which are often around.

That being said, I would not just choose one based on the purchase price. I would consider everything about the properties such as location, potential tenants, strata fees and management, property condition.. the list could go on.

Hope my comments have been of some help.

Kevin Rudd
http://forum.thepropertydomain.com/