Long Term Price Growth

Yesterday I was kindly sent a graph showing the last 20 years of growth on the Nasdaq stock exchange composite index. The Nasdaq is a market-capitalisation-weighted index that tracks nearly all stocks listed on the Nasdaq exchange. Because of its composition, it is widely viewed as a bellwether for the technology sector and the broader economy. What was highlighted was the Dot Com bubble (a small rise and quick fall) and then the current massive price rises on the back of AI stocks in recent years. Google it.  It is crazy. From this I thought I would look at what the returns have been over the long term in property in Australia compared to rises in prices from inflation.

Data from PropTrack comparing home price movements with the consumer price index (CPI) over the past few decades shows that values have grown at between three and six times faster than inflation.  For Sydney the medium price of a home in 1990 was $187,000, today the medium home price is $1,551,500 which shows a profit over inflation of $1,086,100. It is quite incredible what compounding over time produces in prices rises. You can read the full article here which also reflects on the CGT tax changes that are coming for investment properties. https://www.realestate.com.au/news/the-cities-where-house-prices-rose-six-times-faster-than-inflation/