The wealth of 7 out of every 10 Australian households is vastly better from the average value of their most important asset increasing by 560 percent over the last quarter of a century.
A typical Australian house was worth $210,000 at the start of the 25-year period.
Back then, most communications were conducted by verbal conversation on a Nokia mobile phone, sending facsimiles and posting letters with a 34-cent stamp.
Now, everyone’ daily activities are totally controlled by technology.
Despite significant national challenges over the journey, the combined capital city average house value produced phenomenal growth to be $1,180,000 by the end of 2025.
Property markets in literally every Australian jurisdiction experienced multiple lean years over the period.
Yet sixteen (16) townships across this huge country, including 2 capital cities, produced an increase in their median house value of 700 percent or more.
Capital growth of 540 percent in Sydney’s property market was slightly below the 560 percent national average, while Melbourne (485 percent) was further down the list.
Every single location experienced significant real estate growth, including the five worst performed townships of Mount Isa QLD (250 percent), Kalgoorlie WA (300 percent), Alice Springs NT (320 percent), Broome WA (395 percent) and Karratha WA (400 percent).
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Apartment values increased significantly, but their capital growth rate in every Australian jurisdiction was notably inferior to detached houses. For some cities, the rate of growth for houses was double the apartment growth rate.
From a transaction volume perspective, Australia averaged 480,000 real estate transfers per year.
Propertyology has reviewed the performance of all of the 400+ Australian townships in each of the 25-years. This unique research report summarises things into five (5) separate blocks of 5-years.
2001-2005
This 25-year period began directly after the Y2K fear proved unfounded, just 3-months after Sydney hosted the Olympic Games and while Australians were coming to grips with this nation’s biggest piece of tax reform for decades (the GST).
Stable leadership, policies that encouraged aspiration, and implementation of Stage One of the Asian Century (large scale urbanisation in China and India) underpinned Australia’s strongest economic era from the 40-year period since the mid-1980’s.
With home loan interest rates at 7 percent (+/-) throughout this 5-year window-in-time, high consumer confidence and readily available credit supported strong activity from real estate buyers.
Sydney and Melbourne were the only 2 of 8 capital cities not to produce capital growth of 80 percent or more. Dominated by Queensland, NSW and Tasmania, there were 23 regional cities where house values increased by at least 120 percent over the 5-years ending 2005.
2006-2010
Strong property market momentum came to a grinding halt in mid-2008 when world supply of funding felt the full brunt of the Global Financial Crisis. While Australia’s prudent credit policy largely shielded us from the GFC, other factors contributed to struggles associated with a 2-speed national economy (mining versus ‘the rest’) for several years.
Meanwhile, digitalisation had forced a structural change to real estate marketing, reflected in rapid growth of online activity on REA Group’s platform to 10 million monthly page views in 2010 (continuing to grow to 65 million per month in 2025).
The best and worst performed property markets were in the natural resources-rich states of Western Australia (iron ore, gold and gas) and Queensland (coal, metals and gas).
2011-2015
The 2011 calendar year produced only 397,000 residential property purchases – the lowest volume in this quarter of a century.
The 2014 calendar year began with a crash in commodity prices, the catalyst for several years of problematic property markets for jurisdictions whose economies depend on mining.
On the flip side, Stage 2 of the Asian Century (overseas investment and international students) injected enormous economic growth into big cities around the world, including Sydney and Melbourne.
Meanwhile, major changes to Australian lifestyles were inflicted by large scale take up of smart phones and a (relatively short-lived) obsession with inner-city living.
The frenzy for building highrise apartments was so intense that apartments represented 50 percent of all new residential dwellings in capital cities for an entire decade. Dumb!
The property markets of 90 percent of Australia’s 400+ townships were flat out producing more than about 10 percent capital growth across this 5-year block.
Conversely, the flourishing economy of Sydney and, to a lesser extent, Melbourne was driving real estate activity. A subsequent ripple reaped rewards for adjacent regional cities.
By the end of 2015, Sydney ($900,000) and Melbourne ($700,000) were among a very small percentage of townships whose median house price was not between $300,000 and $550,000.
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2016-2020
This entire 5-year period was dominated by regulatory baseball bats which progressively produced a series of unintended consequences. In response to ‘housing affordability anguish’ in Australia’s two biggest cities, the entire country paid the price of two consecutive federal elections (2016 and 2019) centred around the Labor Party’s threat to inflict pain on the suppliers of 90 percent of Australia’s rental accommodation by scrapping negative gearing.
APRA also enforced a suite of credit policy restraints.
And most state governments tied up landlords with their legislation lasoo.
The collective result was a national economy which marginally avoided recession, consumer confidence was very low, resale housing supply volumes took a deep dive, and only 430,000 properties were purchased in 2018 and 2019.
Tasmania was Australia’s strongest state economy for much of this period.
The aforementioned baseball bats caused a widespread decline in vacancy rates and the onset of future sharp rises in rents.
For perspective, the average price to rent a 3-bedroom house in late 2016 was $570pw on Gold Coast, $490pw in Melbourne, $420pw in Perth and Coffs Harbour, $400pw in Geelong, $380pw in Cairns, $320pw in Dubbo and $300pw in Mandurah WA and Launceston TAS.
By the end of 2020, Perth’s property market had endured 3 consecutive blocks of 5-years which collectively produced only a 40 percent increase in house values. The 5-year periods which bookend either side of the middle 15-years produced 565 percent capital growth.
So, Perth created more growth from those 2 blocks of 5-years than the entire 25-year period produced for Darwin, Melbourne and Sydney. These numbers highlight the volatility of real estate in Australia’s 4th largest city.
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2021-2025
The considerable challenges associated with being cooped up in COVID cocoons created an enforced circuit breaker from the Rat Race routine.
Meanwhile, every level of government threw unprecedented amounts of money at the economy.
People engaged lateral-thinking and households reevaluated their core priorities. It drove new habits, with lifestyle quality at the forefront.
Despite its lowest population growth in over 100-years, Australia saw an all-time record high 644,000 properties purchased in 2021.
Whereas the 2016-20 baseball bats were responsible for Australia’s all-time record low of housing listed for sale, buyer activity for much of 2021-25 was at elevated levels due to a combination of a very tight labour market and an intense desire from households to reconnect with nature.
Housing down was driven by existing homeowners pursuing upgrades, young couples moving out of apartments to become first homebuyers in suburban houses, the work-from-anywhere phenomenon, and regional relocations.
General Summary of the Quarter Century
For much of the last quarter of century, Australia lacked (both) visionary leadership and stability.
Once the 11.5-year reign of Australia’s second longest serving prime minister ended in December 2007, there were 7 different prime ministers over the subsequent 14.5 years.
Despite the daily rhetoric with ‘plans’ to do this-and-that for Housing Supply, the total volume of new housing funded by all levels of government over the last 25-years was a piddly 105,000 dwellings (or just 2.3 percent of national building approvals).
While governments clearly do not fund homes, they are wizards at raising revenue from housing.
During the first year of the last 25-years, buyers were taxed $6 billion in stamp duty charges on real estate conveyances. The size of that ‘mobility restriction tax’ progressively increased to an estimated $30 billion in 2025.
Moreover, capital gains tax and land taxes (both of which are payable only by property investors) increased from $9 billion in 2001 to approximately $50 billion in 2025.
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