Capital Growth Calculator

When evaluating an investment property, you can assess its financial performance through two key metrics: capital growth, which signifies the property's value appreciation over time, and rental yield, which represents the income it generates. Capital growth is the measure of how much the property's value increases as a percentage over time. In simpler terms, it reflects the property's price growth over the years.

In the realm of long-term "buy and hold" investment strategies, the bedrock is a history marked by consistent growth, typically falling within the 6-10% range. This growth is primarily propelled by the interplay of fundamental supply and demand dynamics: the desire of individuals to reside in a specific area and the availability of housing units.

To gauge the potential for capital growth, it is imperative to scrutinise various factors, including the unique characteristics of the location and shifts in demographics. Consider variables such as average income, median age, the balance between owner-occupiers and investors, and whether there exists a precedent of higher property values in the vicinity, often referred to as an "established capital benchmark." Recent historical data underscores that the locations under our scrutiny have experienced significant capital growth, largely attributed to their alignment with the key indicators essential for sustained appreciation in property values.

Each of these elements serves as influential factors in shaping price growth, and it's noteworthy that they can vary not only from one suburb to another but even within the same neighborhood. When evaluating the past performance of an entire suburb, it's advisable to avoid fixating on short-term fluctuations, such as quarterly growth rates, which can be significantly skewed by a few notable transactions.