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Is it true that property prices in Australia double every ten years?

Is it true that property prices in Australia double every ten years?

Is it true that property prices in Australia double every ten years?

Does the current market's pricing support the idea that Australian home prices double in value every ten years?

The answer is somewhat complex, according to Cameron Kusher, director of economic research at PropTrack. However, even though some markets have succeeded in that market over the past ten years, many others have not, even though the rule was generally true for several decades in the past.

According to data from May 2023, as Mr. Kusher explained, the median house price nationwide is $730,000, and the median unit price is $560,000. Therefore, it has taken the median house price 15.4 years or 185 months to double in value rather than the more common 10 years. Unit prices, meanwhile, doubled over the course of 17.8 years, or 213 months.

Zooming in, however, reveals that some markets and subsectors did see a price increase that was much more brisk. For instance, location affects how houses and units differ from one another.

The median house price in capital cities doubled more quickly (14.3 years) than in regional markets (16 years). The situation was different for units, where regional prices doubled more quickly (17.5 years) than those in capital cities (18.1 years), according to Mr. Kusher.

The region of Tasmania experienced the fastest rate of house price growth, with values increasing by 100% in just 5.8 years. Hobart, the state's capital, lagged far behind at 6.8 years. Only three other Australian markets—regional NSW (9.4 years), regional Victoria (9.6 years), and Sydney (9.6 years)—saw their median value double in less than ten years.

Perth (17.8 years), rural Queensland (17.8 years), and rural WA (17.5 years) have seen median house prices double the slowest.

According to PropTrack's analysis, unit prices typically take longer to double than house prices.

Hobart was the only unit market to adhere to the 10-year rule, while regional NSW saw values increase 100% in 13.1 years and regional Victoria saw unit prices double in 13.8 years.

The adage was most false in Perth, where the value of units doubled over a 19.2 year period. Canberra came in second (18.9), closely followed by Brisbane (18.9).

Generally speaking, the median home prices in Sydney, Melbourne, and Canberra doubled more quickly than those in cities with lower median home prices like Brisbane, Adelaide, Perth, and Darwin.

What will the upcoming ten years bring?

The key drivers of strong price growth over recent decades were primarily falling interest rates, which increase borrowing capacity; increasing household incomes as more women joined the workforce; easier and greater access to finance; and migration creating strong demand for housing.

Many of those factors won't have nearly the same of an effect going forwards as they did in the past.

While there is little indication that the strong migration of the last decade will abate, interest rates are unlikely to fall like they have in recent decades, employment participation is unlikely to increase as much, and accessing a mortgage is more difficult than it has been.

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