It pays to look back when looking ahead
If you’re a regular reader of these Market Updates, you’ll be well aware that I am always cautious about making predictions on future movements in house prices or market trends.
Indeed, as recently as LAST WEEK'S POST, I was mentioning this when talking about the number of clients who had been contacting our office at Barry Plant Thomastown to ask about our forecasts on interest rates and median property values in the post-election environment.
However, I was reminded this week that when it comes to predicting what the overall property market might do, one of the best sources of guidance is actually history. As the saying goes, if you want to look to the future, start by looking to the past.
So with this in mind, I looked up some recent analysis from SQM Research which examined the Melbourne property market over the past decade, (which includes the impact of rising interest rates in recent years and the Covid pandemic before that). They make interesting reading.
The figures show that whilst the past couple of years show a flattening of activity, the overall Melbourne market has recorded growth of over 96 per cent in house prices over the past ten years. This means there was an average growth rate of more than 6 per cent per year over that period.
For those that may be interested in a little more detail, the same report showed that the average house price in Melbourne increased by just short of 7 per cent per year, whilst the average unit price grew by just under 4 per cent over the same period.
Those with long memories would be aware that there used to be an old saying in real estate that “house prices tend to double every seven to ten years”. These figures show that this rule isn’t far off the mark, even when you are dealing with a market that faces historic challenges along the way!
So if you’re making plans for the future, I would remind you of what I’ve been saying in so many of these articles in 2025…the earlier you make the move, the less you are likely to be spending.
In the meantime, if you would like an updated appraisal on your current home make sure you’re dealing with accurate numbers, you can give us a call anytime at Barry Plant Thomastown on 9466 3233.
Cheers,
Con Constantinou
Barry Plant Thomastown