How have house prices changed in the last 10 years?

REAL ESTATE

Introduction

For those looking to get into the property market, you’ll understand the market has been experiencing strong growth for many months. In fact, as of July 2021, according to the Domain House Price Report, the median Melbourne house price is $1,022,927. 

It’s difficult to believe that in 2010, the median Melbourne house price was almost half of what it is today. According to Domain, the median Melbourne house price was $553,693, at a time when the RBA cash rate was 4.75% in December, 2010. In contrast, the cash rate today is 0.10%.

Let’s delve into what has happened over the past 10 or so years, and try to understand what we may see in the next 10 years.

Looking back on the previous 10 years.

At the beginning of 2010, Darwin was the second-most expensive capital city in Australia in which to buy a house. It may be hard to believe, but it’s true.

The median price was $616,480 – about $26,000 more than Sydney’s median price. Back then, you could buy a house in Melbourne for about the same price as a house in Perth, with both cities’ medians sitting just above $550,000. 

Perth prices were higher than those in Adelaide and Brisbane, and it was cheaper to buy in Melbourne than in Canberra.

Fast forward 10 years, and Australia – and the world – has dramatically changed. Australia’s housing market has become unrecognisable during this time. 

Perth and Darwin are now relatively cheap, Melbourne is expensive, and Hobart has become a real estate hot spot in recent years.  Sydney remains the most expensive city in Australia.

The end of the mining boom hit Perth, Darwin and certain parts of Queensland very hard. As workers returned home, this interstate move had a positive impact on Sydney and Melbourne. Falling interest rates, and high population and jobs growth in Sydney and Melbourne, also contributed to climbing house prices in these cities. 

In more recent years, regional cities within each state have experienced strong price growth as people sell-up and follow lifestyle opportunities due to the COVID-19 pandemic. 

It’s important to remember, 10 years is a long time and a lot of major events – both international and domestic – can happen, which impacts the property market. Some industries may boom, while others bust. This all affects households’ income and their ability to buy property, or to even continue paying their mortgage. 

In many ways, the world events of the past 18 months, have set the scene for how property markets will perform over the next 10 years. It’s important to remember, that Australia has performed remarkably well during the COVID-19 pandemic. While many states have been subject to prolonged lockdowns, overall case numbers have been relatively low, as compared to other countries.  This is likely to make Australia very attractive to international immigration, further putting pressure on house prices. 

Looking forward to the next 10 years.

It’s important to always remember the core fundamentals in property, and not to buy into speculation or hot-spots. 

As we emerge from the COVID-19 pandemic, it’s important to remember what property types, and locations, buyers will find desirable and attractive long-term. Buyers will continue to seek quality properties that emphasise genuine liveability and lifestyle – and some buyers will be willing and prepared to pay more for properties that have additional space and highlight elements of “pandemic appeal”.

For many Australian households, splurging on overseas travel was a true luxury that many enjoyed. However, it is likely that extended overseas travel won’t be available for a while yet, and many families will park those extra “saved funds”, into property. 

Buyers will continue to look for close proximity to amenities such as parks, shopping centres, schools, road transport and employment hubs. Locations that emphasise the ‘best of both’ worlds – where buyers can enjoy lifestyle amenities, yet still practically get into a capital city a few days each week – will continue to do well over the next 10 years, and beyond. 

Always seek advice from a trusted professional.

Investing in real estate is exciting and when done well, can significantly transform your family’s life.  Now is a great time to get started on your property journey, or continue climbing the property ladder, as interest rates are at an all-time low and confidence is at an all-time high. We are also seeing great quality supply begin to come onto the market. 

To learn more about the benefits of real estate investing and what prices may do long-term, contact us at One Agency.  With One Agency being one of Mildura’s most trusted real estate agencies, we are well placed to provide you with our view of the current market based on our local experience. We’ll thoroughly guide you through the process and help you take advantage of this opportune time in the market.

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