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Do house prices really double every decade?

Debunking the truth on whether house prices actually double every decade and what to look for within a rising property market.


A vast number of investors choose to invest in property for capital growth purposes. Although this is long-term wealth creation strategy, it can provide significant returns (dependent on where you’re investing).


Traditionally, inner-city locations have performed the best from a capital growth perspective. Though, as we’ve experienced in the last decade, house prices have risen significantly in outer suburb locations.


Despite the positive average increase in Australia over the last 10 years, house prices don’t always double every 10 years. To do so, experts have mentioned that property prices need an average annual increase of seven per cent.


Considerations of high values


Past data has suggested that 50% of property markets experienced a double in growth, each decade. Significant growth is dependent on where the demand is.


In an earlier article, we explored key factors that contribute to increased house values. To recap, and to understand where to look if you want capital gains, refer to the factors below.

Look to invest in property markets with a good location
Look to invest in property markets with a good location

Location


To maximize on capital gains from a property market, look for well-positioned locations. That is, locations that are within proximity of:


  • Retail precincts

  • Healthcare and education facilities

  • Jobs and infrastructure opportunities

  • Recreation facilities

  • Public transport


Supply and demand


Look for areas where demand exceeds supply. This drives property prices upward.


The economy


When the economy experiences stages of growth, it can impact employment and wages. As an investor, you should set your eyes on locations that’ll enhance the economy through increased employment opportunities.


The Government


The Government can affect the supply and demand of property markets. Whether State or Federal, they can introduce financial or housing incentives that can influence where people buy. Furthermore, they can also introduce infrastructure and investment opportunities to locations.


Total change in value


We explored the highest performing States and Territories regarding total change in percentage throughout the period of June 2011 to June 2021. To help you understand the decade long progression of property markets, we’ve listed their results below.


New South Wales


In the 10 years leading up to June 2021 property prices in New South Wales experienced the highest average for the country. While higher now, the average house price reached $1,093,100. The total change in percentage was recorded to be 102.13%.


Tasmania


Tasmania experienced significant capital gains of 88.86% in the decade to June 2021. This huge growth resulted in a median home value of $576,200.


Victoria


In Victoria, the total change in residential dwelling values was 73.92% higher than the decade prior to 2021. This change brought the median house price for Victoria to $891,500.


Australian Capital Territory


The average house value in June 2021 for the ACT was $891,700. This was contributed by a total change of 62.87% in house values.


Other locations


Other than the Northern Territory, which experienced a 10.79% decrease in property values, the other Australian states, and territories experienced increases to their property market.


Queenslanders saw their house prices rise by 47.15%. Further to that, South Australia rose by 44.22%, and Western Australia by 16.73%.


For more information


Searching for the best property markets to invest in?


We can help! Give us a call on 1300 130 932 or send us an email to clientservices@reif.com.au.

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