Top-performing property markets over last 20 years

New research from respected property market research firm Propertyology found that median house prices in 111 Australian locations had trebled (or more) over the last 20 years.

“Whether someone purchased real estate in any of our eight capital cities twenty years ago or in a majority of Australia’s non-capital locations, today it’s worth at least three times what you paid for it,” said Propertyology Head of Research, Simon Pressley.

“I don’t know about anyone else, but an average annual capital growth rate of circa six per cent across 20 years sounds damn good to me, especially at a time when Australia’s two largest cities have dropped 10 per cent in value in the past 12 months,” Pressley said.

Mr Pressley said the median house price in Sydney two decades ago was the most expensive in the country at about $220,000, however, anyone who bought in a major regional location back then would have paid a fraction of that price and achieved a similar growth rate over the same period.

He said that, contrary to generalisations that ‘regional’ means ‘high risk’, local economies of numerous regional towns and cities are more diverse than several capital cities.

“There’s risks and opportunities within every location. For capital cities and non-capitals, the years when a location’s property market performs best are when local economic conditions and buyer confidence are strong, and vice versa,” Mr Pressley said.

“Generally speaking, locations with a more affordable median house price have more upside potential for capital growth. For that potential to be realised, the real skill is being able to identify the locations with positive leading economic indicators.”

There’s obviously plenty of people who enjoy the inner city suburban life of capital cities. But only a select few have bothered to think why a whopping 8.4 million Aussies prefer not to live in one of those concrete jungles.

“As a homeowner, beauty is in the eye of the beholder, however, as an investor, beauty is nothing but a barrier for the brain operating at its optimum potential.”

The fact is that the median house price of 103 regional cities and towns trebled in price over the past 20 years.

Regional Australia’s population has increased by an average of 1 per cent per year over the last 17 years (when ABS records began). That’s a higher average annual population growth rate than Adelaide and not too far behind Sydney’s 1.4 per cent annual average across those 17 years.

“The lifestyles, the infrastructure, the food experiences and the scenery in most regional locations is significantly better than what those who haven’t been there appreciate,” he said.

“The most important lesson to learn from historical data was that 100-plus towns and cities produced great growth across two decades. While it occurred in different years for different locations, they all had stages of peaks, troughs and sideways movement,” said Mr Pressley.

“We’ve all heard the story about a one-industry mining town called Moranbah losing $200,000 in one year back in 2013, but Sydney’s pricey Inner-West, the so-called ‘blue-chip’ Balmain, also lost $225,000 over the 18 months subsequent to Sydney’s peak in August 2017,” he said.

“Frankly, in a country as big and diverse as Australia, I wouldn’t invest in Moranbah or Balmain, however, I suspect most people would be surprised to learn that the average annual change in median house price of their municipalities over the past 20 calendar years was 8.1 per cent and 7.8 per cent respectively.”

He said most Australians currently pay between $300,000 and $650,000 for a house in a town or city with a reasonably diverse economy, with plenty of regional locations having both in spades.

“The research clearly shows that regional real estate has just as much potential as capital cities, which is why smart investors make an objective assessment of every location in Australia before buying.”

The full list of locations where median house prices trebled between December 1998 and December 2018 is:

Simon Pressley

Head of Research