How Often Does Property Double in Value?

Every homeowner has likely dreamed of their property doubling in value in the future, turning into a valuable nest egg or funding their next big adventure. But how long does it actually take for a property to double in value? And how often does it happen? While there’s no magic eight-ball to predict the property market’s future, digging into historical trends and understanding the key drivers can paint a picture. 

The Historical Lookback: What the Numbers Say About Doubling

Historically, when we look at the Australian property market as a whole, the time it takes for values to double has seen its fair share of ups and downs. As those reports from the likes of property analyst John Lindeman point out, the long-term averages can sit somewhere in the range of seven to 10 years and sometimes even stretch beyond a decade, depending on the specific period we’re looking at. For instance, Australian house prices doubled in merely six years from 1998 to 2003 and 1968 to 1973, but they also have taken much longer to double from 1987 to 1997 and other times. These figures are based on broad market data across the entire country.

However, we need to remember that Australia’s property market isn’t one homogenous beast. What’s happening with prices in the bustling suburbs of Sydney or the resource-rich areas of Western Australia can be a world away from the trends we see in Tasmania. And that’s where things get particularly interesting. Recent data has highlighted that we’ve seen pockets in regional Tasmania where house prices have bucked the general trend and doubled at a much faster clip than the national average. This highlights a vital point in the property market: while national averages provide a useful overview, the real story often lies in the local market dynamics.

What Makes Property Values Rise (and Sometimes Stagnate)

So, what could contribute to a property’s value going north? It’s a mix of factors that can vary from state to state, and getting a handle on them can help you understand a house or investment property’s growth potential before buying it.

Location, Location, Location (Still the Golden Rule)

You’ve heard it a million times, but it’s still true: location is vital. Properties close to essential amenities like quality schools, reliable transport links (like bus routes or ferry terminals), lively local shopping centres, and appealing lifestyle factors (like proximity to parks, beaches, or cultural hubs) tend to hold their value and appreciate more steadily. So, if you plan to buy a residential or investment property in Tasmania, consider the enduring appeal of suburbs close to Hobart’s CBD or the attraction of coastal towns offering a relaxed lifestyle. These inherent location advantages often fuel strong demand and price growth over the next several years.

The Dance of Supply and Demand

Basic economics plays a significant role. When the number of people eager to buy property in a particular area exceeds the number of properties available for sale, competition heats up, and prices are likely to rise. Conversely, if there’s an oversupply of homes and not enough buyers, price growth can stagnate or even decline. So, understand the supply and demand balance in your target areas before signing the dotted line or even start shopping for properties to purchase.  

Economic Winds: Interest Rates, Inflation, and Growth

How often does property double in value? The economic winds matter, too. The broader economic climate has a tangible impact on any local property market. Interest rates influence borrowing costs; lower rates can empower people to get affordable home loans, potentially increasing demand and pushing prices up. Inflation can erode the purchasing power of money, and property can be seen as a hedge against it. You also have to look at overall economic growth, as it generally leads to higher employment rates and increased consumer confidence, which can translate into more people being able and willing to invest in property.

The Helping Hand (or Hindrance) of Government Policies

Government policies at the federal and state levels can also shape the property market. First-home owner grants or stamp duty exemptions and concessions can stimulate demand at the entry-level. In the same way, investment incentives or changes to tax laws can influence investor activity. So, keep an eye on these policy shifts as you plan to buy a property in Tasmania. Gauge whether these changes help empower your purchase or hinder your plan and point you in a different direction. 

Building the Future: Development and Infrastructure

The ongoing infrastructure development and improvement in an area can significantly enhance its appeal and, as a result, its property values. For example, new road networks can improve connectivity, new hospitals can boost local economies, or improved community facilities can enhance liveability. These developments can make an area more desirable and drive up property prices.

Busting the Myth: The “Double Every X Years” Illusion

Does property double every 10 years? How often do house prices actually double? 

It’s tempting to latch onto a simple rule of thumb, like “property doubles every ten years.” However, relying on such a simplistic idea can be quite misleading. The rate at which property values increase is far from consistent. It’s an ever-changing process influenced by a constantly evolving mix of economic, social, and local factors. What fueled rapid growth in one decade might not be the driving force in the next. So, while historical averages give us context, they shouldn’t be treated as a guaranteed prediction for the future.

Smarter Strategies for Potential Growth (Beyond Just Wishing)

Instead of passively waiting for your property to double in value, a more strategic approach involves active engagement and informed decision-making.

Investing with Insight

This means doing your homework and researching areas showing strong potential for future growth. Look beyond the current headlines and study factors like planned infrastructure projects, population growth trends, and local economic development initiatives. Understanding these underlying drivers can help you identify areas that might see stronger price appreciation.

Adding Value to Your Asset

While you can’t control the broader market, you often have some control over your property. Consider renovations or improvements that can boost its appeal and market value. This could range from performing a modern kitchen upgrade to adding an extra bedroom or improving your property’s overall energy efficiency.

Playing the Long Game with Patience and Perspective

Property investment is generally a marathon, not a sprint. While those instances of rapid doubling in regional Tasmania are exciting, value growth for most properties is a more gradual process. Having a long-term perspective and not getting caught up in short-term market fluctuations is truly significant.

Seeking Expert Guidance

Talking to experienced professionals like us here at Deltos Finance can provide you with personalised insights and guidance tailored to your financial situation and the Tasmanian market. We can help you understand the local landscape and make well-informed decisions about financing and reaching your property goals.

Take a Realistic View on Property Doubling

While the dream of seeing your property double in value is certainly motivating, the timeframe can vary significantly depending on multiple factors, many of which are beyond your direct control. Rather than solely focusing on a specific doubling period, a more prudent and effective approach is to comprehend the fundamental drivers of property value growth, adopt sound investment principles, and take a long-term perspective. By staying informed, seeking expert advice, and focusing on the fundamentals, you can position yourself to achieve your property wealth goals.

If you want to learn more about buying or investing in property, don’t hesitate to give us a call. We’ll share our insights and offer expert guidance to help you.