Which capital city has achieved the most median house price growth over the past 20 years?

New research has revealed which capital city has achieved the best median house price growth over the past two decades – but the result will probably surprise plenty of property pundits.

Peter Koulizos (pictured above), Property Investment Professionals of Australia (PIPA) board member and University of Adelaide property academic, said Sydney and Melbourne regularly steal the property media headlines because they are home to a large proportion of the country’s population, but when it comes to the performance over the long term, they both are “well down the leaderboard.”

To determine which capital city had the most established median house price growth since 2002, Koulizos analysed the Australian Bureau of Statistics’ median price of established house transfers from March 2002 to December 2022.

“According to the ABS data, Hobart was the star performer by a country mile over the past two decades, which just goes to show that smaller cities as well as major regional areas can be sound property investment locations,” he said.

Koulizos’ analysis showed that Hobart’s median established house price was 5.9 times higher in December 2022 than it was in March 2002, with its median price soaring from $123,300 to $727,000 over the period.

Clinching second place was another small capital city, Adelaide, which has an established median house price that is 4.1 times higher than 20 years ago, with its price increasing from $166,000 to $680,000.

Placing third was Canberra, where the median house price is currently 4.08 times more than it was in March of 2002, with its price growing from $245,000 to $999,000 over the period.

The country’s three biggest capital cities produced stellar established median house price increases over the period, too, Koulizos said. Brisbane’s quadrupled from $185,000 to $750,000, while Melbourne’s and Sydney’s more than tripled, increasing from $241,000 to $842,000 and $365,000 to $1.27 million, respectively.

Rounding out the capital city list were Darwin and Perth, where the established median house prices were 3.16 and 3.05 times higher now than in March 2002. Over the past two decades, Darwin’s median price grew to $600,000 from $190,000, while Perth's rose to $580,000 from $190,000.

“What these statistics also showed was that every capital city had periods where median house prices fell, rose, or flat-lined because of a variety of economic factors, including two major global events over the time period in the GFC and the COVID-19 pandemic,” Kouzlizos said.

The former PIPA chair said property buyers should be advised to purchase property as a long-term investment and to do their best and ignore any temporary impacts on median prices or markets more generally.

“That’s because as these results show, real estate has a proven history of performance over the decades, with our nation offering a plethora of places – capital city and regional – where homeowners and property investors can strategically purchase property,” Kouzlizos said.

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