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The findings from integrated residential property firm LongView shoed that older dwellings on well-located land have continued to outperform the broader market.
While median house prices in Sydney, Melbourne, and Brisbane grew by 3.3, 1.6, and 6.9 per cent, respectively, over the past year, properties classified as RODWELLs delivered annual growth of 7.04 per cent in Sydney, 5.95 per cent in Melbourne, and 8.23 per cent in Brisbane.
“While overall house price growth has been subdued over the last 12 months, RODWELLs have consistently surged ahead,” said Evan Thornley, co-founder and CEO of LongView.
“RODWELLs are typically quality family homes where land accounts for 75-80% of the property’s value.
“We’ve always known that land appreciates while buildings depreciate so if investors and homeowners want real capital growth, this is where they should be looking.”
The RODWELL Index tracks the price performance of this subset of older, established homes situated in tightly held locations. Despite representing just one in six properties nationwide, they account for 51 per cent of all capital growth, a dynamic LongView said is central to the structural forces shaping the Australian housing market.
The company uses the RODWELL classification to underpin its Home Equity Fund, which co-invests in residential property. The fund posted a return of 4.55 per cent for the most recent quarter.
The Fund has co-invested in more than $130 million worth of residential property across the three cities.
It is open to wholesale investors, starting at $100,000 and has a 12-month return of 9.10 per cent.