40 Years of Growth: Why Australia’s Property Market Keeps Rising
Q: Has Australia’s property market gone up or down over the last 40 years?
A: Overall, it has gone up a lot.
A report from Cotality shows property values have increased by 937.9% since 1986.
- 1986 median home price: $76,000
- 2025 median home price: $880,000
Q: Why does the property market keep rising, even when the economy is tough?
A: According to Cotality’s research director, Tim Lawless, property prices don’t depend only on interest rates. Many other things affect prices, including:
- Government support and stimulus
- How easy it is to get credit
- Population growth and migration
- Big world events or economic shocks
He notes that sometimes prices rise even when conditions look bad.
Q: Can you give examples of surprising price jumps?
A: Yes:
- 1988: Interest rates were nearly 15%, yet property values rose 31%.
- 2021: During COVID-19 and closed borders, values increased by almost 25%.
Q: Which Australian cities grew the most over 40 years?
A: Sydney grew the most.
- Outer West & Blue Mountains: 1,592.4% growth (about 7.3% per year).
- Growth was strong because of new developments and increasing demand.
Brisbane had the second‑highest growth.
- Eastern suburbs: 1,267.7% growth.
- Much of this growth happened in the last 10 years.
Melbourne grew more slowly.
- North-west: 628.6% growth.
- Reason: Melbourne built a lot more new homes, which kept prices from soaring.
Q: Has the market ever gone backwards?
A: Only six times in 40 years: 1990, 1995, 2008, 2011, 2018, and 2022.
Lawless says each decline had different reasons, including:
- Rising interest rates
- Reduced stimulus
- The Global Financial Crisis in 2008
- The rapid 2022 rate hikes
The 2022 fall was short, and prices started rising again in 2023.
Q: What is expected for the property market in 2026?
A: Lawless thinks there won’t be a major downturn, but growth will likely slow because:
- Interest rates will probably stay high
- Affordability is stretched
- Investor confidence has dropped
However, housing shortages will still support prices.
Q: What might happen in each major city in 2026?
Sydney
- Expected to grow slowly
- Gives buyers time to “catch up” with affordability
Melbourne
- More affordable than Sydney
- Could see stronger growth
- Investors may return because prices are comparatively low
Brisbane
- Likely to slow due to high prices
- Long‑term demand supported by:
- 2032 Olympics
- Major infrastructure spending
- Population growth
Adelaide
- Growth may cool
- Issues include:
- Negative migration
- High price-to-income ratio (values > 9x household incomes)
- Possible increase in supply
Conclusion
- At Wakim Realty, we understand that Australia’s property market is shaped by long‑term trends, real demand, and the ongoing value people place on owning a home. The past 40 years show that while the market moves through cycles, property remains one of the strongest and most resilient assets Australians can invest in.
- As we look ahead to 2026, opportunities still exist — especially for buyers and investors who value guidance, local knowledge, and smart decision‑making. Whether the market is moving quickly or slowing down, our mission at Wakim Realty stays the same:
to help our clients make confident choices, secure long‑term value, and build a future they are proud of. - If you are thinking of buying, selling, or investing, our team is here to provide trusted advice and personalised support every step of the way.
- Wakim Realty — Your Partner in Property. Your Partner in Growth.