Data Source: Australian Bureau of Statistics
Using data from the ABS detailing the median house prices in Australia’s capital cities from 2013 to 2023, we can discern clear patterns and intriguing fluctuations. Here are the key insights derived from this data.
1. Steady Growth with Few Hiccups:
The most conspicuous trend is the consistent rise in median house prices in the capital cities over the decade. From a starting point of $1.4 million in 2013-Q1, the market saw a surge to an impressive $2.2 million by 2023-Q2.
However, like any market, there have been bumps along the road. Specific quarters in 2014, 2016, 2018, 2019, 2020, and 2023 witnessed the prices either descending or demonstrating meager growth. Such phases underscore the influence of various external factors, such as global economic trends, local governmental policies, and more, on the housing prices in Australia’s major urban centers.
2. Year-on-Year Growth:
The yearly growth metrics paint a vivid picture of market volatility in the capital cities. Take, for instance, the sharp rise in prices by over 4% in 2013-Q4, followed almost immediately by a 0.70% decline the subsequent quarter. Such drastic shifts, including the meteoric 9.23% growth in 2021-Q4, underline the dynamic nature of the housing market in urban Australia.
3. Rolling Mean – A Smoother Perspective:
Introducing the rolling mean offers a way to filter out short-term disruptions and grasp a clearer long-term perspective. The narrative that emerges showcases a solid upward trajectory for house prices, hinting at the underlying strength of the Australian capital city housing market.
4. Compound Annual Growth Rate (CAGR) – A Detailed Viewpoint:
The CAGR provides insights into the average growth trajectory over the years:
– Initial Years (2013-2015): Growth remained modest, hovering around the 1% mark.
– Middle Phase (2016-2019): A range-bound fluctuation ensued, with growth touching lows of 0.68% and peaks of 0.88%.
– Boom Phase (2020-2021): A noticeable acceleration in growth, culminating in a remarkable 1.42% by the end of 2021.
– Recent Trend (2022-2023): A slight slowdown, signaling either market stabilization or other inhibiting external forces.
Conclusion:
The Australian capital city housing market, as delineated by the past decade’s data, offers a mix of optimism and caution. While the general direction points towards growth, the year-on-year vacillations offer a note of caution to prospective investors and homeowners.
Disclaimer: The information presented is based on my personal opinion and is derived using my own methodologies. This analysis does not claim to offer investment advice or an exhaustive examination of the factors influencing the Australian capital city housing market.