Australian housing beats global sharemarket returns over 26 years

An analysis by The Australian has found that house prices in five of Australia’s eight capital cities have outperformed even US stock market returns over the long term.

Based purely on capital growth, houses in Brisbane, Adelaide, Perth, Hobart and Canberra have risen by more than the booming US tech-heavy Nasdaq index since 2000.

The remaining three capitals - Sydney, Melbourne and Darwin - outperformed all other major sharemarket benchmarks in the analysis, including Australian shares.

The details

The Australian first conducted an analysis of 25 years of growth across different investment assets in late 2025, comparing sharemarket benchmarks with median house prices measured by the Real Estate Institute of Australia.

“The analysis focuses purely on capital growth because there is insufficient long-term data covering rents, dividends, borrowing costs and other property holding costs,” The Australian Personal Finance Writer Anthony Keane writes.

At the time of the original analysis, Adelaide was the surprise winner, with the city’s median house price up 559% to $860,000.

But 10 months later, Adelaide has been replaced in the top spot by Brisbane, where the median house price has risen 667% to $1.15 million since the turn of the millennium.

Perth moved up from sixth to fourth place as its housing boom continued to outpace other cities, with its median house price up 536% to $980,000.

Australia’s most expensive housing market, Sydney, slipped from fourth to eighth place after being hit earlier and harder by the 2026 housing downturn.

Its median house price is still the highest in the country at $1.55 million, but its long-term capital growth now ranks below both the US Nasdaq and S&P 500 indices.

Over the same period, which has included the extraordinary growth of major US technology companies such as Apple, Meta and Google, the Nasdaq rose 4,573 points, or 489%.

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US shares, as measured by the S&P 500, rose 405% over the same period, marginally more than Sydney houses at 400% and well ahead of Melbourne houses at 295%.

Australian shares, as measured by the ASX 200, gained 3,331 points, or 161%, over the same period.

Australian real estate investment trusts, or A-REITs, recorded just 15% capital growth over the 26-year period.

Anthony Keane also sought the views of Baker Young Managed Portfolio Analyst Toby Grimm, who said the strong performance of Australian capital-city housing came down to a “simple supply and demand equation where it’s performed exceptionally well”.

“You’ve got limited supply of housing stock with limited new stock being added … population growth has definitely added to demand,” Mr Grimm told The Australian.

Mr Grimm said the strong performance of US shares, which have grown at roughly twice the rate of most other major global sharemarkets since 2000, was largely driven by innovation.

“Structural growth stories in the market at the moment are related to technology and AI, and largely US companies have been at the forefront,” he said.

The Australian’s analysis also found that even if Australian capital-city house prices fell another 10%, the top five capitals would still exceed the long-term returns of all indices in the comparison except the Nasdaq.

Looking ahead, Mr Grimm remains optimistic about the long-term prospects for both Australian capital-city housing and US shares.

“If you’re talking over the very long term the reality is for shares and property generally you’re looking at around a 10% per annum compounding return,” he said.