Growth in housing across Australia at the macro level has broadly outpaced inflation, creating real returns for property owners across Australia.
In the June 2020 Pain and Gain report, it was noted the median return for resales on property held for 30 or more years had a nominal profit of $569,000.
On the median resale through the June quarter, this amounted to a real return of $230,000.
Over a 20 year period however, each capital city dwelling market has returned growth higher than inflation.
Real returns for housing in Australia increased from the late 1980s, driven by deregulation in the financial system, increased globalisation and relatively low levels of supply to strong population growth.
Stubbornly low inflation against a low interest rate environment may continue to boost real returns for home owners, but could exacerbate the challenge for non-home owners to get on the property ladder.