Australian house prices

House prices soar by 500% in 25 years

PHOTO: Australian house prices have surged by as much as 500 per cent in the past 25 years, according to fresh data from the REIA.

The median house price has surged from $160,000 in 1996 to $825,000 in 2020, an increase of 500 per cent in 25 years, the Real Estate Institute of Australia (REIA) has revealed.

As for other dwelling types, including units and apartments, capital values have increased by just over 400 per cent over the past decade and a half, REIA’s latest Real Estate Market Facts has shown.

This difference in growth is, however, slightly offset by the fact that units and apartments do produce higher yields.

In fact, over the 25-year period, Australian housing yields tightened from 5.1 per cent to 2.9 per cent, while other dwellings have recorded a slight drop in yields from 5.2 per cent to 3.7 per cent.

Looking at the individual capital cities, houses in Darwin recorded the highest return at an average of 4.2 per cent.

“In 1996, housing investments in Darwin were yielding 6.4 per cent. Melbourne and Sydney have always had the lowest yields, both falling from around 4 per cent in 1996 to just 1.8 per cent in 2020,” REIA president Adrian Kelly said.

“The pandemic saw Melbourne and Sydney experience rising vacancies, with Melbourne now the highest in Australia at 5 per cent while Sydney is currently at 3.7 per cent.”

According to Mr Kelly, it is these losses that have led to a decline in investor activity, but the situation is on the upswing as demand continues to lift.