There is a theory that property prices double every 7-10 years. It’s one of those things that everybody seems to know but Ive never really seen any hard evidence.
Some smart journalist from the Sydney Morning Herald (6th July 2018) tested the theory recently and found the results were less conclusive.
This is when dwelling prices were last half of what they are today:
Sydney – October 2002
Melbourne – April 2007
Brisbane – August 2002
Adelaide – June 2002
Perth – May 2002
Hobart – June 2003
Darwin – April 1999
Canberra – April 2002
Regional NSW – June 2002
If you look at the Sydney prices the last time they were half their current levels was in 2002. Hard to believe, but that is what is being reported. So what they are saying is that in 2018, prices were 100% higher than the 2002 levels.
What this doesn’t tell you however is that between 2000 and 2002 prices absolutely spiked, then didn’t do a lot for another 10 years. If you look at how much the prices have gone up between 2000 and 2018, I am sure they would be considerably more than 100%. Probably 200%. So whilst this data may be accurate, the information is a little misleading.
Having a look at the Newcastle council area results (which I have manually calculated) the current median house price is $610,000. The last time it was half that amount ($305,000) was back in November 2004. Whilst we also failed to meet the 7-10 year benchmark, we did better than most. We actually have done better than Sydney.
But when you go back even further, the time when the median price was half again ($152,500) was only 3 years earlier in 2001. The time it was half again ($76,000) was in 1989. So, does the theory hold up? It took 14 years from 2018, then 3 years, then 12. If you start from today and look backwards, prices in Newcastle have doubled every 9.7 years. But if they stay flat for another 5 years it will be a whole different answer. The question of how long it will take to double to $1.22m is anyones guess. But, mark my word, it will happen. – it’s just a matter of time.
Obviously some areas will always do better than others. Your place may have well exceeded this amount if you had of renovated or extended. If you bought a place and an awesome cafe strip opened up just around the corner or the local school suddenly became a selective school, these would all reduce the amount of time it would take to double your place.