AUSTRALIANS frustrated by poor returns from real estate and the sharemarket in recent years have flocked to bank deposits, but a new analysis delivers some surprising results.

Property and shares lost popularity as cash became king after the global financial crisis.

However, while bank deposits offer safety and have paid good interest rates to savers and retirees, cash comes third in the race for investment returns over the past decade.

AMP Capital examined the growth and income provided by property, shares and cash since 2003, and found shares easily had the highest investment return of 8.7 per cent per year.

Property was 5.5 per cent and cash 5.3 per cent.

''The last five years have been bad for shares, they are still one-third down from their high in 2007 and that's why people are feeling depressed,'' said AMP Capital chief economist Shane Oliver.

He said shares looked good in the 10-year analysis because it also covered the boom years of the mid-2000s, and included the solid dividend income paid by shares averaging about 4.5 per cent a year over the past decade.

''Property also had a great run until 2008 with a once-in-a-generation boom that got under way in the mid-90s. But it fell out of bed in 2008 with a lot of forced sales and low confidence.

''Cash has had a great run but it's starting to slow down.''

Dr Oliver said bank deposit interest rates were likely to fall further in 2013 as the Reserve Bank was expected to continue lowering the official interest rate.

Last week's wealth data from the Australian Bureau of Statistics showed households have amassed cash holdings of a record $749 billion.

Cash now represents 23 per cent of total household assets, above the decade average of 20.4 per cent.

Research group Lonsec has predicted shares to rise about 8 per cent by July next year, driven by falling interest rates.

''People's incomes from cash are getting low and they start sniffing around to see what's out there there are some good yields available on the ASX,'' Lonsec head of equities research Bill Keenan said.

''We're now five years since the peak, and we have got to a point where most of the selling has been done, so there's momentum for buying shares.

''Shares are obviously a lot more volatile than cash but when mums and dads are saying they don't like the sharemarket, it will probably take off.''

Forecasters do not expect big gains from property in 2013, although falling interest rates are likely to support house prices.

Mr Keenan said a deterrent for property was the high costs of buying averaging about 6 per cent of the purchase price and the high costs of selling of about 2 per cent.

AMP's Dr Oliver said the key message for savers and investors was to diversify across cash, shares and property.

''Cash was the place to be in 2011 but there's a danger for ordinary Australians. Trying to pick what asset is the best place to be for the next year, on the back of what happened last year, is bound to be a loser's game.''