The Australian property market tends to fluctuate significantly in the short term due to both domestic and international factors, however, the data shows that the property value appreciates consistently over very long periods at around 5-6%/year.
What will be the median detached property value in the major capital cities in the next 10 years? Obviously, it is a challenge to predict with 100% accuracy.
We use the average growth rate in the last 10 years to forecast the price changes in the next 10 years, assuming the previous trend will continue to repeat in the future.
In 2030, the forecasted median price of detached houses in the major capital cities will be:
Sydney: $1,300,000
Melbourne: $1,000,000
Brisbane: $750,000
Adelaide: $650,000
Sydney
Melbourne
Brisbane
Adelaide
Property Prices in the major capital cities of Australia including Sydney and Melbourne are volatile in the short run, which is due to:
High percentage of investors: investors are usually sensitive to policy changes
Prices are high in comparison to other capital cities, therefore, buyers are cautious about the policy changes or market fundamental changes
Sydney and Melbourne are small markets with only about five million people, which are relatively sensitive to sudden changes in demand and supply
However, at Milk Chocolate, we look at the property market from a long-term perspective. The experience shows that the Australian property market is a safe bet:
Prices generally go up at the rates of 5-6%/year across capital cities
Prices may go down quickly in the short-run, but usually a quick recovery followed after a downturn: prices went down by 13% during the Global Financial Crisis and 14% due to the lending tightening policy in 2012, but the market also quickly recovered one year later
The property market is a pillar of the Australian economy, generating jobs and revenue to the government, therefore, government policies tend to implement policies to sustain the market should an adverse events happened
COVID-19 is no doubt a major economic and social crisis for the Australian economy: the number of jobless within a scope of one-two months is unprecedented. However, the government’s reactions were also bold and targeted to the most vulnerable segments of society. In addition, the economic fundamentals remain strong, which includes:
High population growth
Favourable business environment and open economy for foreign investment
Strong mineral and resources sectors
Long-Run Price Trends ($000, detached houses)
Sydney
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Disclaimer: All data and information provided on this site are for informational purposes only. Milk Chocolate makes no representations as to accuracy, completeness, currentness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis.
