Study finds strong capital growth but uneven outcomes across cities and regions
The average value of the main residence for Australian households has risen about 560% over the past 25 years, according to a new study by property market analyst Propertyology.
At the start of the new millenium, a typical house was worth about $210,000. By the end of 2025, the combined capital city average house value had reached about $1.18 million.
Across more than 400 townships, every market recorded substantial house price growth, though results varied widely. Sixteen townships, including two capital cities, saw median house values increase by 700% or more.
Sydney’s house prices rose about 540%, slightly below the national average, while Melbourne’s growth of 485% was weaker again. Even the lowest performers – Mount Isa, Kalgoorlie, Alice Springs, Broome and Karratha – at least doubled or tripled in value over the quarter century.
Apartment prices also climbed but underperformed detached houses in every jurisdiction. In some cities, houses delivered roughly double the capital growth of units, reinforcing the long-term outperformance of freestanding stock.
Over the full period, Australia averaged around 480,000 property transfers per year.
Propertyology said that from 2001 to 2005, the market benefited from steady economic conditions, 7% (approximate) mortgage rates, firm consumer confidence and easier credit. Six of the eight capital cities recorded capital growth of at least 80%. Regional centres in Queensland, New South Wales and Tasmania led the way, with 23 regional cities posting gains of 120% or more.
Between 2006 and 2010, the global financial crisis disrupted funding markets and highlighted a “two-speed” economy, with resource states diverging from the rest. At the same time, digital marketing accelerated, and online property search activity grew quickly. Outcomes in Western Australia and Queensland were closely tied to commodity cycles.
From 2011 to 2015, national sales volumes fell to a low of 397,000 in 2011. A sharp fall in commodity prices in 2014 weighed on mining regions. By contrast, Sydney and Melbourne gained from stronger services sectors and inflows of overseas investment and international students. A wave of inner-city high-rise construction meant apartments made up about half of all new capital city dwellings for a decade. Most townships struggled to achieve more than about 10% capital growth over this five-year period, while Sydney and Melbourne pushed ahead, ending 2015 with median house prices of about $900,000 and $700,000 respectively.
The 2016–2020 period was dominated by regulatory and political interventions focused on housing affordability and investment. Federal election debates around negative gearing, tighter lending rules and more restrictive state legislation on landlords all contributed to weak confidence and reduced listings. Only about 430,000 properties sold in both 2018 and 2019. Vacancy rates tightened, rents began to rise from relatively modest levels, and Tasmania stood out as one of the strongest state economies. Perth, in particular, showed how volatile markets can be: over three consecutive five‑year blocks it recorded only about 40% cumulative growth, yet the two five‑year periods at the edges of the 25 years delivered about 565% combined capital growth.
From 2021 to 2025, the COVID-19 pandemic reshaped demand. Lockdowns, remote work and stimulus measures prompted households to reassess location, space and lifestyle. Despite the slowest population growth in more than a century, transaction volumes hit a record 644,000 in 2021. Demand was buoyed by low interest rates, tight labour markets and the rise of flexible work, while listings remained constrained. Many buyers traded apartments for houses, moved to regional areas or upgraded existing homes.
“For much of the last quarter of century, Australia lacked both visionary leadership and stability,” Simon Pressley (pictured right), head of research at Propertyology. “Despite the daily rhetoric with ‘plans’ to do this-and-that for housing supply, the total volume of new housing funded by all levels of government over the last 25 years was a piddly 105,000 dwellings (or just 2.3 percent of national building approvals).”
Pressley added that while governments clearly do not fund homes, they are “wizards at raising revenue from housing.”
“During the first year of the last 25 years, buyers were taxed $6 billion in stamp duty charges on real estate conveyances,” he said. “The size of that ‘mobility restriction tax’ progressively increased to an estimated $30 billion in 2025. Moreover, capital gains tax and land taxes (both of which are payable only by property investors) increased from $9 billion in 2001 to approximately $50 billion in 2025.”
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