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Houses To Take Longer To Double In Value

Housing Commentator Ashley Church has released data showing that house prices doubled every ten years, on average, between 1990 and 2011 – but that the rate of growth slowed to the point where houses prices took twelve years to double in the years between 2012 and 2021.

Mr Church, who is a former Chief Executive of the Auckland Property Investors Association and the Property Institute of New Zealand, based his findings on data obtained from Property Data Company, Valocity, which provided the median house price for New Zealand on the last day of each year between 1990 and 2021. (attached)

“The idea that house prices double every ten years has been well known amongst property investors for decades, and is now also generally understood by the public – but it has been mostly based on anecdotal evidence. I wanted to see if the data actually confirmed that belief”.

“The results were astounding and provide a whole new insight into how the property market actually works”.

Mr Church said that he analysed the data in a way which compared an entire decade for each year. 1992 to 2002, 1993 to 2003, 1994 to 2004 and so on. He said that, in this way, the figures provided a better picture of what happened in any given year – but also provided a snapshot of the entire decade.

“As you would expect, the average increase moved around a bit in each ten year period highlighted by these figures – but when we averaged those increases for each of the ten year periods ending in the years 2002 to 2011, the average rate of growth was exactly 100%”

However, Mr Church says that the average dropped for the ten years between 2012 and 2021.

“In most of the ten year periods ending in a year between 2012 and 2021 the average rate of house price increase was much lower – and the average was only 73% for that entire decade. However, when the figures were reviewed over twelve years, the average was 99%”

Mr Church says that this new information allows us to draw two very important conclusions:

  • “The ‘doubling of house prices’ that some property commentators talk about can now be empirically proven to be true”.
  • “That doubling is continuing, but is now taking longer to occur. Whereas it took exactly ten years, on average, for house prices to increase by 100% for the periods 1992 to 2002 through 2002 to 2012 – that rate has now slowed, and it currently takes twelve years for house prices to double”.

Mr Church says that, in his opinion, this slowing down in the rate of house price growth reflects the ‘physical barrier’ presented by high house prices and the fact that it is more difficult for first home buyers, and others, to keep paying ever increasing prices.

“In my opinion, this trend will continue and, when we look back on house price growth in 2030, we’ll find that houses prices are still doubling but that it’s taking even longer – perhaps 14 to 15 years – for this to happen”.

Mr Church says that these trends, rather than the events of the market right now, are a far more important and reliable indicator of what the property market is likely to do.

“Market forces, not Governments, determine what happens to house prices”,

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