When discussing growth rates with clients or setting up financial models for clients I use a growth rate of 5%. I use this rate because it creates a more conservative view for modelling. In reality, property in Australia grows closer to 8% -10% p.a. in the longer term. Most people have trouble believing this and are quite surprised when I show them the figures. Here is the last 50 years of Brisbane’s median house prices. Quite surprising isn’t it?!
| YEAR | VALUE $ |
| 1970 | 8,500 |
| 1980 | 34,500 |
| 1990 | 108,000 |
| 2000 | 185,000 |
| 2010 | 455,000 |
| 2017 | 655,000 |
In fact, earlier this year Brisbane had its first suburb crack $2 million as the median house price! This goes to show that the earlier you get into the market, the better you are going to be in the long term.