- September 20, 2010
- Posted by: admin
- Category: House prices
The housing market has recorded an average annual growth rate of 8.4 per cent over the past three decades.
RP Data’s latest findings found that Australian house prices double every 10 years based on an annual compounding rate of 7.2 per cent. This is confirmed by any member of the public that has owned property for 10 years or more.
In comparison, the rate of inflation has averaged about 4.6 per cent over the last 30 years and 3.2 per cent over the last decade.
If you look at the information produced by RP Data there have been some periods where growth rates have well and truly eclipsed this average rate of growth and periods where prices have well and truly underperformed.
The information shows one of the weakest periods for Australian house prices, over the five years from 1990 to 1995 the median house price across Australia increased by just 2.8 per cent per annum. This was mainly due to the recession and interest rates at very high levels.
On the other side the most spectacular five year run was recorded during the boom which ran from 2001-03 around most areas of Australia. Despite a slowing in growth rates between 2004/05, the five year period ending July 2005 saw average house price growth of 13.9 per cent per annum.
I think going forward property owners should find some comfort in the fact Australia still has a shortage of property so this should continue to drive prices.