Long term growth of property value in New Zealand over the past 20 years was on average 6.5% per year, however past growth does not necessarily equate to future growth. House prices in certain suburbs do not always go up consistently. There are various peaks and troughs that contribute to the overall result. Over the long run inflation pushes prices only one way, up.
Median prices in New Zealand would show more consistency as compared to individual suburbs. As various factors can affect which suburbs move up faster or slower. Obviously the main one being road, shopping or infrastructure development.
Here’s an example of how much the value of a property can grow over the next 10 years
Present Value: $700,000
Growth rate: 5%
Period in years: 10
Future Value = 700,000 over 10 years at 5% pa = $1,140,226.24
This is a total capital gain of $440,226.24
