We’ve all heard the saying that property is a long-term investment. Well, here’s something to consider: many homeowners have seen their property values quintuple over the course of a typical 30-year mortgage.
If you ask a long-term homeowner what they originally paid for their property, you’re likely to hear a jaw droopingly low figure.
Plenty of Australians look back and marvel at the amount they paid for their homes, often feeling a sense of relief that they made their purchase when they did.
A Proven Track Record of Growth
Here’s an interesting fact: over the last century, residential property values in Australia have risen by an average of 10.9% annually.
While there can certainly be short-term fluctuations and periods of stagnation, the overall trend has consistently been upward.
In dollar terms, this growth can be astonishing. For instance, in mid-1992, the median house price in Sydney was $221,770. Fast forward 30 years to 2022, and that median value skyrocketed to $1,124,421, and today it stands at approximately $1,473,038.
This upward trend is echoed in major cities across the country.
What About Recent Buyers?
If you purchased your home more recently, you may be wondering how much its value has increased since your purchase. CoreLogic examined historical data to determine how national property values have changed from the year of purchase, starting from the mid-90s.
The results indicate a clear pattern: the longer you’ve owned your home (or investment property), the greater the potential increase in value.
- 1995 Purchasers: Properties bought in 1995 have likely risen in value by 437%, meaning they could now be worth more than five times their original price.
- 2005 Purchasers: If you bought your home about 20 years ago, you might see a 148% increase (2.5 times the original value).
- 2020 Purchasers: Homes acquired just a few years ago may have increased in value by 34%.
- 2023 Purchasers: Even homes purchased last year may have experienced capital growth of 4%.
Increase in National Home Values Since Year of Purchase
- 1995: 437%
- 2000: 308%
- 2005: 148%
- 2010: 94%
- 2015: 57%
- 2020: 34%
- 2023: 4%
(Stats source: CoreLogic)
Why an Increase in Your Home’s Value Matters
An increase in your home’s value is more than just something to brag about at your next barbecue. Rising property values are a crucial source of household wealth in Australia.
Furthermore, an appreciation in your home’s value can facilitate refinancing to a more competitive mortgage rate or provide the equity needed to invest in rental properties or fund other personal goals, like your children’s education.
Start Your Property Journey Today
The key takeaway is that when you purchase a home—whether you’re buying your first home or upgrading—it’s wise to keep an eye on future potential.
As time passes, today’s purchase price can look better and better, and you may find yourself grateful for the decision you made.
Contact me today to find the perfect home loan to kickstart your property journey, or to tap into the equity in your current home.
0447 654 321
