But there’s a problem with this.

These numbers are HEAVILY influenced by where house prices happened to be 10 years ago … and where they are today.

And if the 10-year period you look at:

• Starts at the end of a boom and finishes during a downturn, then house price growth looks terrible.
• Starts at the end of a downturn and finishes during a boom, it looks amazing.

Auckland is a great example.

Because 10 years ago, Auckland had just finished a massive house price run. And right now, it’s in a deep downturn. 

10 years ago, Christchurch had been flat for ages. Now it’s at the top of a massive boom.

So looking at a single 10-year window might not tell you what often happened in the past.

So, I often say to investors, don’t ask: “What happened over the last 10 years?”

Instead, ask: "What usually happens over 10 years?"

That sounds great in theory, but how do you get the numbers?

Here’s a better way to look at house price growth

The trouble with these numbers is that they are hard to calculate. 

That’s for 2 reasons:

1. You need to get high-quality house price index data. That can cost $5k-$10k.
2. You need to run hundreds of rolling calculations.

And unless you're the sort of person who enjoys spending Friday nights inside Excel, it's a bit of a mission.

So, I asked our economist (Ed) to create a tool.

And for once in his life, he's actually listened (and remembered), and he built you this 👇

Here’s what it does: 

Let's say you want to know how fast house prices typically rise in Hamilton over 10 years.

Over the last 10 years, Hamilton house prices rose by 4.5% per year.

So, you might think, well, that gives me a sense of what might happen over the next 10 years.

But that’s only one 10-year period. So, it might not tell you what usually happens. 

That’s why this tool compares:

• January 1992 with January 2002.
• Then it does the same with February 1992 and February 2002.
• And March 1992 and March 2002.

And it does this 292 times. That way, you can see what tends to happen over 10 years. (Or, however many years you care about).

Hamilton house prices have only gone up 4.5% per year over the last decade.

If you bought at any random time since 1992, and held for 10 years, 74.3% of the time, your house value would have gone up by at least 5% per year. 

That’s assuming that your house followed the market perfectly. 

So, it gives you a more well-rounded way to understand how much house prices have gone up in the past.

Here’s how you can use it. Head to the: Long-term house price growth calculator

Then, you put in:

• The area you want to look at
• How many years you’re planning to hold a property
• How fast you want to assume house prices go up

And it shows how often that growth rate has been achieved in the past.

Here's why it matters

Now, this tool won’t predict the future. Nothing can.

But I am a big believer in putting the data in your hands.

That way, you’re in the driver’s seat of your property investing journey, and you can get a sense of how fast you think house prices might go up in the future.