Historical Performance. Let’s look at the property market!
History tends to repeat itself. “I can see far into the future… for I have studied the past.” – Winston Churchill
When it comes to property investment, it’s quite relevant to look at historical data. Think about it: rental prices keep going up and houses have never been so expensive. This begs the question: is property investing sustainable? Let’s look at some historical data on house prices:
Figure: Historical house prices in Australia.
It’s hard to believe that 50 years ago you could buy a house in Brisbane for $8,500! If I told you to buy as many houses as possible because prices are going to quadruple in the next 10 years, you’d likely call me out and disagree. But look at what happened in the 70s – house prices tripled or quadrupled across Australia.
You might often hear people saying that since house price growth has been so ridiculous in the past decade, it’s not sustainable and that the “bubble is going to burst.” But look back at the data – house prices have continually gone up decade after decade, even during the recession that we had to have in the 1990s! And no burst bubbles either.
While it’s not entirely accurate to say that property prices double every 10 years because every decade has been different. Some more than double, some less. However, on average over the past six decades, the increase has been greater than double, making it a reasonable planning assumption to say that prices will double every 10 years.
Stay tuned for more daily insights from Wealth Through Property.
~Daimien Patterson