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PPG_Blog_Sept_image 2_property market trends

The share market seems to be featuring heavily in the news lately. Billions of dollars are wiped from the Australian stock exchange one day, small gains made the next. Jittery shareholders are kept guessing and stressing! Melbourne’s property market also moves and changes, but how does it fair over the longer term?

Historical evidence shows that in 1987, the year of a significant stock market drop, the median house price of a house was $97,000. For each of the following three years the median price increased by over 10%, resulting in a median price of $147,000 in 1990.

In the 10 years to 1997 the median price had doubled from $97,000 to $179,500, more than doubling again to reach $425,000 by 2007. Despite the median price dropping during subsequent years − in 1991, 1993, 1995 and 2005 – a solid appreciation in value over the medium term became apparent.

Today, in 2015, the median house price in Melbourne is just over $700,000 and rising. So, like the share market, the property market is changeable over the short term. Economic factors and influences can cause significant fluctuation. What is very clear, however, is that over the longer term – say five to 10 years and beyond, house prices are almost guaranteed to increase. And this is why property makes for an excellent medium to long term investment.

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