Good stuff in this thread. I guess the main reason for buying property instead of equities is how much more efficient the structure for leveraging is in the property market. If you want to use your shares as collateral to leverage your equity position, you will both pay a higher interest rate cost for the leverage, as well as being under other terms to top-up your account incase stock-markets drop and LTV increases.
Whereas in the property market as long as you pay your interest rate payments, the banks are more lenient in terms of asking you to top up, just because your LTV temporarily looks pretty bad. But that of course is different in different markets. I have heard that HK banks were tougher in this sence in the past, actually asking people to come up with more cash as collateral when property prices plummet too much. That would fuel even further sell-offs, since that is forcing more people to sell, so I can't see that banks would actually do this in a big scale next time property prices fall significantly.
So conclusion is, equity returns looks more attractive, as your conclusion says, but leverage changes the picture and usually thats why property investments in the end "win". It's really hard to get properly rich without leverage.