Growth Slows in last 5 years

"Over the past ten years capital city home values have increased at an average annual rate of 6.8%, however it has been a tale of two distinct five year periods: the boom times during the first part of the decade and more subdued growth recently. ...

The recent superior performance of units as opposed to houses continues today and is reflective of changing lifestyle patterns. In particular, first home buyers and young professionals are likely to be much more attracted to an inner city unit rather than a house 20 plus kilometres from the city centre, especially if they work centrally and they also work long hours.

Overall the data highlights the impact of the property 2001-2004 ‘property boom’ which has well and truly lifted the annual growth rates across the first half of the decade. The two recent growth phases (ie 2007 calendar year and 2009/2010) were much more sublime compared to the meteoric rate of growth early in the new century. Looking to the future, with housing credit growth constrained and affordability a barrier to market entry, property values are likely to grow at a slower pace and the likelihood of large spikes in value growth over a 12-24 month period as witnessed at times during the past decade is less likely. Basically, property value growth fundamentals are largely returning to normal conditions after being abnormal for much of the last decade. "

Source: RP Data