Why median house prices could be well over one million dollars by the end of this decade

The latest forecasts from property investment gurus suggest to us that median house prices will be well over $1 million in every capital city at the end of this new decade, and in many cases they will be considerably more.
This is certainly a bold forecast but a lot can happen in 10 years, let's consider what happened to property values over the last 10 years:

In early 2000 we were paying less than $300,000 for an average house in Sydney, $230,000 in Melbourne, $145,000 in Brisbane, $149,300 in Perth, $188,000 in Darwin, $134,000 in Adelaide, $160,000 in Canberra and $112,500 in Hobart.

10 years on and the the average house in all capital cities has doubled in value - and then some. In fact there are many areas where prices have increased to 200% of their value at the start of the millenium.

These increases have occurred despite a recession in 2001, a change in government, periods of high interest rates and the Global Financial Crisis
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We're certain more Australians would have bought more properties back in 2000 if they knew what would happen to values over the next 10 years.

The good news is that the fundamentals suggest the next 10 years are going to be just as good, if not better for property as the last 10 years were. We are moving into a new economic cycle with record population growth, fuelled by rising immigration and a baby boom. At the same time we need more dwellings for the same number of people because we live in smaller households. However, we have a shortage of housing, vacancy rates are low, rents are rising and the cost of new construction is escalating.
Considering all this together suggests that property values are once again likely to rise significantly over the next decade.

To safely steer through the next decade to the point where property values will have once again doubled, successful investors will need to disregard the "market noise" and not be intimidated by the small stuff, like interest rate increases, tax issues and the negative news in the media.

Our major cities of Melbourne, Sydney and Brisbane are growing at an enormous pace and are bursting at the seams. Some forecasts are suggesting that the population of Melbourne, Sydney and south east Queensland could each grow by close to 700,000 people over the next 10 years.
This will create a building boom and economic prosperity that should give investors the confidence to invest in property when they realise that we will need to build around 170,000 new dwellings each year.

At the same time there will be billions of dollars worth of activity in extensions and alterations. We will also require more shopping centres, nursing homes and hospitals, as well as schools and petrol stations.

Here's a startling, yet true fact: State Planning for south east Queensland stipulates that up to 60 20-storey towers need to be built every year in Brisbane alone to accommodate the 1.5 million people projected to move to the booming region over the next 20 years.
Things will get interesting because while our community requests less urban sprawl, they also want less high rise living, so the idealistic preferences will have to give way to reality.
What this means is that it is likely we will have more decentralised development in the future with the emergence of medium to high rise residential buildings in the suburbs rather than just in the inner suburban areas. These will occur around public transport terminals, railway stations and possibly conjunction with large shopping centres.

All this sets us up for the "mother of all property booms" - where property values will keep rising until median values reach well over $1 million. It might not be smooth sailing to the finish line. If history repeats itself, and it surely will, during that time we will have another property boom, a further property slump and most likely another recession. That's just the way property and economic cycles work. Keep your eye on the big picture and your long term goals, like 20-20 will be here sooner than you realise...