In an article by Propertyology, it is highlighted that Australian real estate has demonstrated remarkable resilience, safety, and performance over the past 50 years, making it one of the strongest assets worldwide.
Over the past half-century, the median house value for Australia’s capital cities collectively has grown from $15,000 in 1972 to $915,000 in 2022, boasting an average annual capital growth rate of 8.2%.
Sydney, Melbourne, Hobart, and Darwin experienced yearly declines in 8 out of the past 50 years. Despite the irregular nature of property market performance, this translates to capital growth occurring in 5 out of every 6 years, or 83% of the time. Canberra and Perth each faced 10 years of declines, while Brisbane (6) and Adelaide (3) exhibited the most stable track records.
Below is a graphic that showcases the impressive performance of Australia’s 50 largest townships’ property markets in response to various adversities encountered over these five decades.
Throughout periods of high national unemployment rates, recessions, increasing interest rates, the Global Financial Crisis, a national credit squeeze, and the recent health pandemic, the property market has faced significant challenges. However, the data presented in the graphic emphasizes that real estate values continue to rise in various regions across this vast country.
During downturns, Sydney and Melbourne experienced their most significant drops in the two years ending mid-2019, with median house values falling by $190,000 and $134,000, respectively. This decline was mainly due to an overstimulated local construction sector leading to an oversupply, which coincided with APRA’s tight credit policy. Despite further decreases of $150,000 (Sydney) and $100,000 (Melbourne) in 2022, the net increase in house values over the decade ending 2022 was $600,000 and $300,000, respectively.
Perth’s median house price reached its peak at $585,000 in July 2014. The extended global downturn in iron ore prices became the primary reason for Perth’s declining real estate values, taking eight long years to return to $585,000.
Many of Australia’s 400 regional townships also experienced lean periods at various times. Notably, only one out of the last 50 calendar years saw house values decline in every capital city.
The single year in question was 2022 when the aftermath of the GFC led to a mere 3.2% decrease in the combined capital city median house value. However, various regions in Australia experienced an increase in house values during 2011, making it inaccurate to label 2022 as a year of national downturn.
Decades of evidence show that numerous regional locations have outperformed every capital city property market. Ballarat, Bendigo, Coffs Harbour, Orange, Maitland, Dubbo, Albury, Wagga, Launceston, Victor Harbor, and Toowoomba have long histories with only a few instances of real estate value declines, and those drops were relatively small.
In fact, many regional locations boast long-term average annual capital growth rates that surpass those of more prominent capital cities.
In conclusion, the Australian real estate market has demonstrated remarkable resilience, safety, and performance over the past 50 years, as highlighted by Propertyology. With an average annual capital growth rate of 8.2%, the market has shown impressive growth despite various adversities such as recessions and the recent health pandemic. The data presented by Propertyology emphasizes that real estate values continue to rise in various regions across this vast country
