PHOTO: The Australian economy’s ability to go over 27 years without recession has relied heavily on residential property
Residential property holds a special place in the Australian economy. From the booms to the declines, understanding the Australian housing market is crucial to understanding the nation’s past, present and future prosperity.
Australian housing market history
The value of Australian residential property has climbed considerably in the past quarter century. According to CoreLogic analysis conducted in 2018, the median value of Australian houses increased by 412% in the 25 years since 1993.
The growth in property values has also been well-spread throughout the country. Measured by the annual percentage in change in house values, the major Eastern capital cities, Sydney and Melbourne, lead the nation at 7.6% and 8.1%, respectively. However, the smaller cities of Adelaide and Brisbane, which saw the weakest growth across the country’s capitals relatively speaking, still experienced respectable growth in their residential property markets of 5.9%.
Benefitting from rising terms of trade, supportive monetary policy, attractive fiscal conditions, foreign investment, and carefully managed immigration policy, property has proven a powerful means of growing the wealth of the nation, along with that of individual households. It’s been the successful transfer of wealth from the mining boom, through the financial system to the household sector, that has driven this process and turned Australian’s into a nation of hopeful homeowners.
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