Australian house values have increased 414.6% in the past 30 years, according to a new study from Aussie Home Loans.
Aussie, now part of the Lendi Group, has examined housing trends over the last three decades with the aim of reminding Australians of their long-term property goals.
The Aussie Progress Report, commissioned by Aussie and developed by CoreLogic, considers several significant events including the COVID-19 pandemic, the GFC, and other major economic events from 1992 to 2022. It showed in that period there was 293.1% increase in the price of Australian units.
Lendi Group CEO of distribution Brad Cramb (pictured) said the residential real estate asset class was more robust than ever.
“Property underpins a lot of wealth for Australians,” Cramb said. “The recent data released by CoreLogic revealed that residential real estate is worth $9.8 trillion, which dwarfs the next asset class being Australian superannuation at $3.5 trillion.”
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During the 30-year timeframe there had been seven periods of sustained increase in values at the national level, and seven periods of decline.
The 30-year annualised growth was 5.6% across capital cities combined and 4.5% across regional areas combined.
Cramb said he knew the importance Australians placed on home ownership.
“Owning a home is one of the biggest and most important purchases most people make in their lifetime and when Aussie entered the market some 30 years ago, the median dwelling value across the country was $114,034,” he said. “Today it is more than $700,000, demonstrating the gains that can be made over a generation.”
The introduction of mortgage brokers over the last 30 years had benefited consumers and was one of the most transparent industries worldwide.
“Consumers can continue to get good products, services, and rates through a broker which fuels how Australians can purchase property,” said Cramb.
“A broker can alleviate stress for all property buyers on their new home journey. Our brokers help a client navigate their options, understand their available choices, and demonstrate there is more lending options out there.”
Cramb said brokers need to stay on top of market trends, be a client’s voice of reason, and partner with a good aggregator to provide tools and pass key information onto the client so they can make an informed decision.
He said there were multiple factors contributing to the market upswing over the last 17 months – they included record low interest rates, a combination of government incentives such as the first home guarantee, and stimulated market activity.
“The consecutive months of upswing from October 2020 is the longest period of growth we have seen in 30 years,” Cramb noted.
“If history tells us anything, the long-term property game is most important. A combination of these factors over time improves competitiveness in the market and allows consumer choice fuelled by economic factors.”
Although it was impossible to predict the future, Cramb said there were factors in the short term which would affect the Australian property market.
“Although I don’t have a crystal ball, I say to clients buying property is a long-term strategy,” he said.
“Coming into an election year, traditionally the market waits for the election outcome before a market decision is made.
“There are pockets of good opportunity. As we enter a period after a pandemic, we are entering untrodden territory. What we do know is, the residential real estate market is very robust.”
