Wednesday, January 14 2015
Brisbane has had the highest average annual house price growth across the country’s capital cities since 1970 at 11% per year, according to Hotspotting.com.au.
This means the city’s house prices have doubled about every six years over the past 35 years, as per analysis from Hotspotting.com.au’s director Terry Ryder.
It's worth noting, however, that Brisbane houses sold for a median price of just $8,500 in 1970, according to statistics from the Real Estate Institute and BIS Shrapnel. So the rapid rate of growth since that time has come off a particularly low base.
According to the CoreLogic RP Data home value index, the average house price in Brisbane was $466,500 at the end of 2014.
* Home prices up 7.9% in 2014
Using figures from the Real Estate Institute of Australia and BIS Shrapnel, Ryder calculated average house price growth over several decades in each of the capitals and found that Brisbane has been a consistent performer over the last four decades and even in more recent times.
For example, Brisbane’s prices have improved by an annual average of 13.6% since 2000, while Sydney’s annual average has been 10% during that time, Ryder said.
“The growth has not been even, with the seventies being particularly strong for Brisbane real estate,” said Ryder. “The eighties were also healthy, but in the nineties value growth was sluggish in all cities.”
However, even with the latest price boom, no capital city has averaged better than 8% annual growth since 1990, he said.
Melbourne's solid growth
Melbourne has also performed relatively well over the long term, averaging better than 10% annual price growth since 1970, with its house prices doubling every seven years on average, according to Hotspotting.com.au.
Given that the nineties were poor for property price growth across the board, a number of the capital cities experienced the best growth either side of that decade.
For example, the bulk of Melbourne’s high growth came before 1990 and the city has been a mediocre performer since, said Ryder.
“When you consider that Brisbane, Melbourne, Perth and Sydney have all averaged 9%-11% a year since 1970, it shows how much the nineties have dragged down overall property performance.
“It took the market quite some time to recover from the high interest rates of the late eighties and the economic recession of the early nineties.”
Sydney average over long term
Hotspotting.com.au's analysis also noted that the country’s strongest property market today, Sydney, has performed poorly compared to other cities over the long term.
While its 12% annual price growth led the national market in 2014, based on CoreLogic RP Data’s figures, Hotspotting.com.au found that since 1980, Sydney house price growth had been outpaced by Brisbane, Perth, Melbourne and Canberra, and matched by Adelaide.