If I asked you to nominate the market which had recorded the best long-term capital growth in Australia, what would your answer be?

 

Sydney, the capital city with the nation’s highest property prices?

 

Perth, which has had a booming property market lately and has led the nation on price growth for past couple of years?

 

Brisbane, which always attracts strong demand from buyers of all sorts?

 

Or perhaps Regional Queensland, which benefits from internal migrants moving from others parts of Australia and from investors seeking affordability and strong yields?

 

The correct answer is none of the above.

 

The market jurisdiction which has led the nation on long-term capital growth is: Regional Tasmania.

 

This is the outcome of research conducted by the Property Investment Professionals of Australia (PIPA), which analysed Australian Bureau of Statistics’ data on established median dwelling values over 20 years - from June 2004 to June 2024.

 

The top location recorded growth of 233% while the worst grew 100% over the two-decade period. 

 

In comparison, over the past 20 years, the stock market (S&P/ASX 200) increased by 120%, according to investing.com.

 

In general terms, the best capital growth has been smaller capital cities or more affordable regions. 

 

The top result was “the Rest of Tasmania”, which means Tasmania outside of the capital city Hobart or Regional Tasmania - where its established median house price rose from $169,000 20 years ago to $449,000 in mid-2024. 

 

The best capital city performers were also some of our nation’s most affordable throughout the period with Adelaide, Hobart, and Brisbane taking out the top three city rankings. 

 

PIPA comments that property markets are not linear – rather, price growth occurs at varying points over time. Hobart, for example, has experienced a softening of prices over the past few years, but its house price have almost tripled since 2004 – up 193% in 20 years.

 

Adelaide and Brisbane have both had very strong markets in the past two years but both had long periods of flat-lining prices throughout the past two decades.

 

It reflects the reality that real estate consumers get the best results through long-term ownership and PIPA Chair Nicola McDougall says property owners should always adopt a long-term mindset.

 

But PIPA research indicates many investors don’t follow that philosophy.

 

PIPA’s 2024 Annual Investor Sentiment Survey found that 61% of investors who sold in the past year had a holding period of less than 10 years – and 17% of those investors who sold indicated they had owned the property for less than three years. 

 

So the rankings from the PIPA research on capital growth over the past 20 years are:

1 Regional Tasmania

2 Adelaide

3 Hobart

4 Brisbane

5 Regional Victoria

6 Perth

 

Sydney ranked seventh and Melbourne 11th, once again disproving one of the real estate’s greatest myths, that you get the best capital growth in the biggest cities – and that prime out-performs affordable.

 

And the worst performers were Darwin and “the Rest of Northern Territory” – but even the remote markets of the NT achieved a doubling of property values over 20 years.