Capital Growth on Sydney Property over 17 years
- Arnold Shields
- Oct 8, 2010
- 2 min read
Updated: Jun 18
Key Findings from the Data
Region | 1993 Price | 2010 Price | % Growth | Annual Compound Growth |
Inner West | $208,000 | $870,000 | 318% | 8.8% |
City & East | $290,000 | $1,210,000 | 317% | 8.8% |
Northern Beaches | $277,500 | $1,025,000 | 269% | 8.0% |
Lower North | $368,000 | $1,330,000 | 261% | 7.9% |
Sydney Average | $188,050 | $626,444 | 233% | 7.3% |
South West | $120,000 | $397,000 | 231% | 7.3% |
South (duplicate?) | $218,000 | $701,000 | 222% | 7.1% |
West | $127,000 | $405,250 | 219% | 7.1% |
Upper North Shore | $250,000 | $793,250 | 217% | 7.0% |
Canterbury Bankstown | $166,000 | $500,000 | 201% | 6.7% |
What’s the Problem with the 17-Year Figure?
Cherry-picking start points distorts the perception of consistent performance. The early 1990s were a housing downturn—any recovery looks strong when starting from a trough.
The compound annual growth rate (CAGR) gives a more realistic view for investors. In this case, 7.3% per annum is the average for Sydney, not 13.7% as a straight average might falsely suggest.
Recent trends (post-2010) indicate closer to 5% growth annually, which suggests market maturity or cooling, influenced by tighter lending rules, inflation pressures, and affordability caps.
Why CAGR is a Better Metric
CAGR gives you a true average rate of return per year, factoring in the compounding effect. It's what you'd use to compare investments across time or regions.
For example:
CAGR = (Ending Value / Starting Value) ^ (1 / Years) - 1 Sydney: (626,444 / 188,050) ^ (1 / 17) - 1 = ~7.3%
Investor Takeaway
Relying on long-term, cherry-picked growth stats can lead to unrealistic expectations.
Recent data and shorter-term market behaviour, along with rental yields, expenses, tax implications, and capital growth forecasts, provide better guidance for property investors.
Always pair past performance data with macro trends, like migration, infrastructure, employment, and interest rates.
Disclaimer:
The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.
