What Is a Good Return on Investment in Australia?
A good return on investment (ROI) isn’t just about short-term gains. In property, ROI should be viewed over a full market cycle, not a single year.
Returns typically come from two sources:
- Capital growth - increase in the property’s value over time.
- Rental income - money received from tenants.
Historically, strategic Australian investment property has delivered reliable compounding returns, particularly when held through multiple cycles. The key is not chasing the highest return today, but securing assets positioned to grow sustainable over time.
The average real estate return in Australia is around 8-12% per year.
At Search Property, our property investment strategies have delivered consistent results above the national average 5 years in a row.
Capital Growth: The Real Driver Behind Property Portfolios
Capital growth is what allows Australians to build property portfolios, not just own one property.
Capital growth refers to the increase in a property’s value over time. As values rise, investors build equity which can be accessed and used to fund future purchases.
This is how many successful investors scale:
- Property values increase
- Equity is created
- Equity is leveraged into the next asset
- The portfolio compounds
Over the past 30 years, house prices in Australia have increased on average by around 6.4% per year.
This long-term growth trend shows why capital growth can be far more powerful for wealth creation than short-term metrics or yield alone.
Capital growth allows investors to:
- Build equity in properties
- Improves loan-to-value ratios (LVRs)
- Increase financial flexibility
- Improve borrowing power
- Reduces reliance on saving new deposits
This compounding effect is why many successful investors scale property portfolios faster than savers who keep all their money in the bank.
Deposits, Stamp Duty & Why Calculators Only Tell Part of the Story
Tools like stamp duty calculators and mortgage calculators are useful starting points, but they don’t explain strategy.
What calculators don’t show:
- How deposit size impacts long-term scalability
- The opportunity cost of waiting to save more
- How entry price growth can outpace savings
- The effect of buying sooner rather than waiting
Many Australians delay investing to build a larger deposit, only to find that property prices rise faster than their savings. In many cases, time in the market has a greater impact on outcomes than attempting to time the market perfectly.
Current Australian Property Market Snapshot
Australia’s housing market has shown continued strength and resilience:
- Median house prices across capital cities are above $1 million in six capitals, now including Perth joining this group for the first time.
- Recent data shows national dwelling values rising, with some cities like Brisbane and Perth seeing double-digit annual growth.
- The total value of Australian residential dwellings recently rose to around $11.9 trillion.
These trends reflect ongoing demand driven by limited supply, population growth, and economic fundamentals.
Leverage: Why Property Works Differently to Other Investments
Leverage is the use of borrowed money to control a larger asset.
Property is uniquely powerful in Australia because:
- Banks lend large amounts against residential assets
- Loan terms are long, predictable, and regulated
- Inflation reduces the value of debt over time
In other words:
Whilst you might only put down a 20% deposit, you control 100% of the property.
Over time, if the property appreciates by 20%, your equity increases by far more than your deposit portion.
When combined with capital growth, leverage allows investors to amplify outcomes without increasing effort.
Used correctly, leverage accelerates wealth creation.
Used without strategy, it magnifies mistakes.
This is why planning and structure matter more when it comes to building long-term wealth through property investment.
Budgeting and Saving
Budgeting and saving are essential foundations, but they are not wealth creation strategies on their own.
Saving helps you:
- Build a financial buffer
- Reduce risk
- Create options
But investing is what creates momentum.
Most financially successful Australians didn’t build wealth by cutting expenses forever. They focused on deploying capital into productive assets that grow faster than inflation over time.
How Australians Actually Become Wealthy
When you look at long-term data, most Australian wealth is built by people who:
- Acquire growth assets clearly
- Hold them through cycles
- Use equity strategically
- Avoid emotional buying and selling
- Focus on fundamentals, not headlines
Wealth is rarely built by perfect timing.
It’s built by consistent action with the right strategy.
Waiting for certainty often ends up being one of the most expensive decisions investors make.
Learn How to Invest in Australia the Right Way
The biggest mistake property investors make isn’t choosing the wrong suburb, it’s starting without a clear plan.
Successful investing requires:
- A strategy aligned to long-term goals
- Market selection based on data, not trends
- Understanding how growth, debt, and equity work together
This is where experienced guidance can make all the difference.
At Search Property, we help Australians build successful property portfolios by:
- Focusing on capital growth fundamentals
- Selecting markets with long-term demand drivers
- Structuring purchases for scalability, not shortcuts
Ready to Build Wealth With a Clear Property Strategy?
At Search Property, we help Australians create data-driven property investment strategies aligned with long-term wealth goals. Book a FREE investment assessment with Search Property. We’ll discuss your goals and position, and help you build a clear plan to move forward with confidence.
Disclaimer: Important Notice for Readers
By reading the content provided on this blog, you acknowledge and agree to the terms outlined in this disclaimer, binding yourself to its provisions unconditionally.
This blog presents information for informational, educational, and general non-advisory purposes only. It's important for you, the reader, to understand that the information provided does not take into account your specific personal, financial, or other circumstances. Consequently, we do not offer legal, financial, investment, or taxation advice, recommendations, or guidance. Before acting upon any information from this blog, you are strongly advised to consult with an independent professional, including legal, financial, taxation, accounting, or other relevant advisors, to verify the information’s relevance to your particular situation.
The information is provided in good faith, derived from sources believed to be reliable. However, we do not guarantee the accuracy, completeness, or applicability of the information to your individual circumstances, needs, objectives, or financial situation. The information may be selective and has not been independently verified. Therefore, it should not be the sole basis for any decision-making.
We expressly disclaim any liability for errors, omissions, or inaccuracies in the information, as well as any direct or indirect losses, damages, or expenses that arise from relying on our content, regardless of the cause, including negligence or other factors. Your engagement with this blog is entirely at your own risk.
Please be aware, we do not hold an Australian Financial Services Licence as defined by section 9 of the Corporations Act 2001 (Cth), nor are we authorised to provide financial services, and we have not provided financial services to you.
.png){kind=icon}
.png)
