Why Australian real estate could be the best investment asset on the planet

When it comes to investments, politics and the economy, little ol’ Australia barely gets a mention on the international stage. We serve a fraction of the global investment community, and despite everything our nation has going for it, it’s considerably smaller than most western nations and thus sees far less of the limelight.

All that said, could our island nation have the best performing investment asset on the planet? I’m talking about our real estate investments. And the evidence is compelling that—in the last 50-odd years—it’s been the best place for investors to put their money.

I gained this idea from Simon Pressley, property expert at Propertyology, who pointed out, “Australian residential property has consistently been one of the best-performing assets on the planet. Between 1972 and 2022, Australian property grew by an average of 8.2 per cent per annum.”

Simon’s claim appears accurate and we’re not all that surprised—from our board to our employees to our loyal investors, everyone at Properties & Pathways has reaped the rewards of robust Australian property investments. But what makes Australian real estate such a remarkable investment opportunity? Why does our property market differ from the rest of the world?

Historical performance that speaks volumes

The numbers tell an impressive story. Over the past three decades, according to CoreLogic, Australian house prices have achieved an average annual growth rate of 6.4 per cent, demonstrating remarkable resilience even during global financial turbulence.

National dwelling values have surged by an astounding 382 per cent over a 30-year period—translating to an average annual compound growth rate of 5.4 per cent since 1992. Through various economic cycles, including recessions and market corrections, the Australian property market has continued to demonstrate impressive long-term growth and stability.

Why is Australian real estate such a strong performer?

Is this an accident? Of course not. There are a range of major factors driving our real estate market to generate returns seen by few other countries’ markets:

1. Immigration policies

Australia’s significant immigration rates since the 1970s have created sustained housing demand across the country. Research suggests that for every 1 per cent increase in a postcode’s population due to immigration, housing prices rise by approximately 0.9 per cent annually.

This ongoing influx of new residents continues to fuel demand in the property market, to the extent that finding a home for new arrivals and first-home owners has become dire. In response to this, the Australian government has implemented a ban on foreign investors purchasing established homes between 1 April 2025 and 31 March 2027, in the hope that housing market pressures will ease.

2. Investor-friendly tax environment

Australian property investors enjoy considerable tax advantages. These include a 50 per cent capital gains tax discount for properties held longer than 12 months and negative gearing benefits allowing investors to offset property investment losses against their taxable income.

Prime Minister John Howard was behind the CGT discount, enacting this huge tax benefit for investors during his first term in office. Australia, although having contentiously debated the issue multiple times throughout its political history, remains one of the few countries to allow unrestricted use of negative gearing losses to offset income from other sources. We can’t stress the profitability this provides real etate investors, particularly those with high taxable earnings.

These incentives make property investment particularly attractive compared to other asset classes and other property markets around the globe.

3. Limited housing supply

Australia faces unique supply constraints that have helped maintain (and indeed enhance) its property values. There’s a cultural preference for low-density housing with private outdoor spaces and a notable lack of medium-density housing options. This is what experts call ‘the missing middle.’

Development challenges—including fragmented land ownership and community resistance to higher density projects—make the situation that much more complicated. There’s a big supply-demand imbalance and that contributes significantly to price growth over time.

4. The great Australian dream

Maybe it was watching the happily housed family in Hey Dad..! or seeing all those vast, leafy backyards in the homes of Neighbours, but the deeply ingrained cultural aspiration of owning a spacious home with a backyard has continued to influence housing demand and urban planning decisions.

There’s a cultural preference here that shapes development patterns by local councils and indeed by the builders and homeowners that fill the land they govern, and helps maintain the value of detached housing. Scarcity can lead to drastically improved property prices.

5. Clear legal framework for investment

Australia maintains transparent regulations for property investment. We’ve consistently been labeled one of the most transparent real estate markets on the planet, and this gives foreign investors very good reason to ship their capital here.

Foreign investors must obtain approval from the Australian Taxation Office before purchasing residential property, and government policies generally direct foreign investment toward new developments. This supports housing supply expansion. And also contributes to investor confidence, with regulations and rules creating trust and transparency for those parting with offshore capital.

Is Australian property right for your investment portfolio?

We need to stress: past performance isn’t indicative of future results. This is true of any investment, including property .But looking in the rearview mirror, Australia’s property market has demonstrated remarkable consistency over multiple decades.

The combination of favourable demographics, tax advantages, supply constraints and cultural factors creates conditions that historically have supported strong long-term returns. We’ve seen this first-hand across our many, many residential and commercial property investments.

What’s your experience with property investment? Have you considered adding Australian real estate to your portfolio? If so, get in touch with us. At Properties & Pathways, we create opportunities for Australians to invest in high-quality property via expertly managed property syndicates. You pool your funds together with us and other sophisticated investors, while we do all that we can to protect your capital and provide a prosperous investment that rewards you for years to come.

Contact us today for an obligation-free chat about how we can help you achieve your investment goals through Australian property.

Not ready to talk? No problem. Simply subscribe to receive our investment updates, and we’ll be in touch with you as soon as our next opportunity is around the corner.