Here is two numbers worth remembering: 4 and 13
Since 1980 the time between house price growth peaks is four (4) years and not the often quipped seven (7) years.
And it would appear that the time between peaks is getting shorter.
This makes sense given the way we receive information these days and how fast news spreads. Gone are the days of a weekly or even monthly real estate report in the printed press. News is at our fingertips 24/7. Quarterly house price growth reports have now morphed into daily indexes.
It also takes about 13 years for house values to double.
It is often said that housing values double every seven years; that it is that they grow by around 10% per annum.
Well, that might have been true in some distant past – and was probably not – but on recent trends; even when factoring in the big price hikes in 2020 and 202; the annual rate of capital gain, across Australia and for detached houses, is now 5.4%.
Of course, there are a range of different locational experiences – in terms of both cycle length and annual gains – across the country.
Some locations miss a cycle – because they get oversupplied or overvalued – think regional resource towns and the most recent annual price growth experience ranges from 3.7% (19.5 years to double in value) to 10.4% (7.3 years) depending on the which major urban area is investigated.
Sorry folks but these findings are part of a recent consultancy job. Embargoes apply.
Thanks for reading to the end of this post. And whilst you are down here why not help me — via a small donation – continue the Missive coming to you.
To donate click here.