The best-performing property markets of the past 20 years

Australian property has long been seen as a reliable wealth generator, but few have ever quantified its total performance, capturing both price growth and income.

Residential investment property ranks as Australia’s third best-performing asset class over the past 20 years (see the Livewire Long Term Investing Report 2025 for full rankings), with an annualised return of nearly 10%. Yet, just as equities within an index can diverge dramatically, property markets across the country have delivered very different results.

In this deep-dive edition of the Report, we reveal how Australia’s major housing markets performed using Cotality’s Hedonic Total Return Index - a measure combining capital growth and reinvested rental income to show the true compounding power of investment property.

The findings challenge conventional wisdom. While Sydney and Melbourne have long dominated headlines, smaller capitals — those offering affordability, lifestyle appeal, and stronger yields — quietly delivered superior total returns.

Download the Livewire Investment Property Performance Tables for full city rankings and watch our in-depth interview with Cotality Australia’s Head of Research, Tim Lawless, as he unpacks:

• What drove the long-term winners
• Key lessons from 20 years of data
• The outlook for the next cycle
• Whether property can keep compounding at this pace
• And his top pick for the next 20 years

We have provided a summary of the highlights below.

🥇 Adelaide: The quiet outperformer

Barely anyone saw this coming, and we have the data to prove it. 

In a poll we ran two weeks ago, 43% of Livewire readers tipped Sydney as Australia’s top-performing property market, while just 5% backed Adelaide.

Yet the City of Churches has quietly emerged as the undisputed leader of Australian real estate, delivering total dwelling returns of around 560% over 20 years - comfortably above the national average of 477%.

Remarkably, units in the city delivered more than 600%, making them the top-performing property type nationwide.

“Adelaide delivered about 560% growth including income - stronger than the national average - but it’s been a more volatile market," explains Lawless, adding "smaller capitals like Adelaide, Hobart, or Darwin tend to see more extreme cycles over time."

For most of the early 2000s, Adelaide flew under the radar. But affordability, high rental yields, and a constrained housing pipeline created the perfect foundation for explosive returns. Unlike cities that relied on speculative demand, Adelaide’s growth was underpinned by owner-occupiers and stable cash flow.

Lawless notes that Adelaide’s transition from “steady” to “standout” has been gradual but deliberate.

“Affordability has been one of Adelaide’s strongest attributes, and limited supply has kept prices resilient. Now, with more infrastructure and densification, it’s really maturing as a capital city.” he says.

The message for investors is clear: steady markets can still deliver powerful long-term outcomes when yield and affordability work together.

🥈 Brisbane: The comeback capital

Brisbane’s path to silver was anything but smooth. Total dwelling returns of roughly 545% reflect a market that spent much of the 2010s in the doldrums before roaring back to life in the 2020s.

“Brisbane is one of the strongest markets now, but between 2010 and 2019 it was quiet,” recalls Lawless. “It took years for the market to recover from an apartment oversupply, but interstate migration has since rebounded sharply.”

The turnaround story began when lifestyle became a currency. Queensland’s combination of affordability, warm weather, and outdoor living began attracting Australians rethinking their priorities - particularly post-COVID.

As Lawless explains, migration and infrastructure have been pivotal to the resurgence.

“Brisbane was really in the shadows for a long time. But the combination of lifestyle, affordability, and strong migration has put it back on the national radar," he says.

Major infrastructure projects, such as the Cross River Rail and 2032 Olympics facilities, have added structural momentum. Combined with record-low vacancy rates, Brisbane now enjoys the kind of confidence Sydney once monopolised - but with stronger yields and lower entry costs.

🥉 Perth: The cyclical powerhouse

Perth’s housing market is as cyclical as the mining giants that power its economy. The trick with cycles, however, is to rise more than you fall, and the City of Light nailed it.

Perth takes bronze, rounding out the top three with total returns of around 487%. The Western Australian capital’s history reads like a microcosm of the nation’s resource-led fortunes - soaring during booms, slumping in downturns, and rising again from the ashes.

“Perth went through extraordinary cycles,” says Lawless.

“During the mining boom, housing prices doubled in about five years. After that, it endured a long correction, but since 2020 it’s been very strong again, rising from a low base.”

That resilience is now paying off. With renewed migration, a revitalised mining sector, and record affordability relative to the eastern states, Perth is once again a national leader in both price momentum and rental yield.

But Lawless cautions that Perth’s volatility can cut both ways.

“Markets like Perth can give you strong total returns if you buy at the right time,” he says. “But they’re not for investors who can’t stomach big swings in value.”

How Sydney and the other capitals fared

Sydney and Melbourne - Australia’s economic heavyweights - delivered solid long-term gains but fell short of the national leaders. Sydney dwellings returned 453%, Melbourne 431%, while Canberra edged ahead at 463%.

Their relative underperformance, says Tim Lawless, comes down to simple economics.

“Sydney is still a benchmark market, but affordability constraints are limiting its upside,” he notes.

Melbourne’s softer run since COVID could prove advantageous.

“The price gap between Sydney and Melbourne hasn’t been this wide since 1999 ... it’s a compelling value story for the next cycle," saws Lawless.

Regional markets also performed well, particularly those near major capitals with strong infrastructure and lifestyle appeal.

Units versus houses

One thing that surprised us — and will hopefully give a confidence boost to owners of strata-managed properties — was the enduring myth that “unit prices don’t appreciate.”

Adelaide was the clear outlier, with unit values soaring more than 600%, while even in Darwin, units outperformed houses. Across most other cities, unit prices lagged detached houses by around 50 percentage points — but that’s still a long way from “poor performance.”

Over the long run, units have clearly appreciated and delivered attractive total returns once you factor in rental income.

“Units tend to have yields about a percentage point higher than houses. That income boost made a difference over time," says Lawless.

For investors chasing steady cash flow and more affordable entry points, units have proven their worth. And while past performance isn’t a guarantee of future returns, with prices where they are now, more investors are likely to lean toward apartments and townhouses — where selectivity will be key.

In our interview, Lawless emphasised that the next 20 years will be less about the dwelling type and more about quality, location, and functionality.

“It’s really about the quality of stock and location now,” he says. 

“We’re seeing a premium emerge for well-located, higher-quality apartments - especially those close to employment hubs and transport. Poorly designed or oversupplied stock won’t share the same upside.”

Lessons for investors

The data proves what many long suspected: investment properties have been one of the most powerful wealth-building tools for Australians.

And interestingly, the story hasn’t just been about Sydney - property has been a strong performer from coast to coast, provided you held on long enough.

The ability to control a large asset with a relatively small deposit, while collecting rent month after month, compounds over time in a way that few other assets can match.

The combination of long-term capital growth, steady rental income, and the discipline of holding through cycles remains the cornerstone of success in this asset class.