The Global Financial Crisis (GFC) of 2007–08, considered by many economists to be the worst financial crisis since the Great Depression of the 1930s, threatened the collapse of large financial institutions and saw Australian and international property prices plummet dramatically.
However, the domestic property market has sprung back in leaps and bounds since then, showing the resilience of bricks and mortar as a strong long-term investment.
Australian house prices have increased by almost half in the past six and a half years, spurred on by rapid rates of growth in Sydney and Melbourne.
The latest CoreLogic RP Data Property Pulse report shows combined capital city home values increased by 43.1% between December 2008 and June 2015. However, breaking this growth down city by city shows a rather disparate growth rate over this period, with Sydney up 68.7%, Melbourne 54.1%, Darwin 22.2%, Canberra 22.2%, Perth 14.3%, Adelaide 12.4%, Brisbane 8.9% and Hobart a nominal 0.2%. While we’ve seen periods where values have fallen, they largely continued to rise despite variances across cities.
And if you look at Australia’s average housing growth over the last 20 years, the increase is even more pronounced, with combined capital city house values increasing by a colossal 436.6% and unit values up 330.4%.
However this growth has come at the expense of housing affordability, with Social Services Minister Scott Morrison acknowledging that a lack of affordable housing was at the centre of most of Australia’s social problems. He told the Institute of Public Affairs that secure housing is essential to protect vulnerable Australians.
