Capital Growth

Put simply, Capital Growth is the increase in the value of the property over a period of time.

A property that rises in value from $400,000 to $440,000 over a 1 year period has experienced capital growth of 10% PA.

The average capital growth rate, according to the Australian Bureau of Statistics in around Australia's capital cities is around 8% per annum.

This capital growth rate is never constant and is continually fluctuating, it is rare but in some years capital growth has actually been negative, or as high as 30% or more in some suburbs.

When investing in property it is important to consider the long term view and average the yearly fluctuations in capital growth out.