Capital Growth
Returns & Analysis
The increase in a property's market value over time.
Full Explanation
Capital growth is the primary wealth-building mechanism for most Australian property investors. It is influenced by supply and demand, infrastructure development, population growth, and local economic conditions. Historically, well-located Australian properties have doubled in value roughly every 7 to 10 years, although past performance does not guarantee future results.
Example
You purchased a house for $600,000 in 2018 and it is now valued at $850,000, representing capital growth of approximately 42%.
Frequently Asked Questions
Should I focus on yield or capital growth?
Most successful portfolios balance both. Capital growth builds long-term wealth and equity for further investment, while yield provides cash flow to hold properties comfortably. Your personal financial situation and goals should guide the balance.
What drives capital growth?
Key drivers include population growth, infrastructure spending (transport, hospitals, schools), limited land supply, employment growth, and proximity to lifestyle amenities. Properties in areas with strong demand and constrained supply tend to see the best long-term growth.