Property Market Update
January 2022

Find out how the housing market shaped up in 2021 and what to look forward to in 2022. 

11 January 2022|4 minute read

property market report january 2022

Australia’s residential real estate skyrockets

It’s no surprise the housing market continued to perform strongly over the last quarter of 2021.

This steady growth is attributed to several factors that influenced the market: persistently low interest rates, higher savings from borrowers, a decline in advertised listings and fiscal and institutional support for households.

The estimated value of residential real estate reached record highs of $9.4 trillion in November, according to data from CoreLogic. That’s a $2.2 trillion increase from the previous year!

Nationally, we reached an estimated 614,635 sales in the past 12 months, the highest in almost 18 years. In the 12 months to November, housing values increased by 22.2%, the greatest surge since 1989.

The value of Australian housing grew 1% in December and 22.1% over the course of 2021, according to Mortgage Business.

Working from home empowers regional growth

As many businesses adopted remote and hybrid working models off the back of the COVID-19 pandemic, movements from busy cities to regional areas continued through 2021.

According to CoreLogic, the coastal suburb of Yamba in the Coffs Harbour-Grafton region of NSW achieved the highest annual growth in units of suburbs across Australia with a 56.6% uplift.

Top value growth tables highlight a surge in regional areas. This includes Ocean Grove units in Geelong (up 41.7%), Fraser Island units in Wide Bay (up 48.2%), and Campbell Town houses in Tasmania (up 50.5%).

According to Domain, the flow to regional areas of Australia may be directly linked to an increased search volume of keywords such as ‘rural’, ‘acreage’ and ‘farm’.

The longing for more space may be indicated by growing searches on ‘garage’, ‘balcony’, ‘courtyard’ and ‘garden’.

Finally, the shift to remote working across the country and the need for more dedicated workspaces at home may be linked to an increase in keyword searches like ‘study’.

Fixed rates are on the rise

Fixed term mortgage rates are anticipated to rise this year, which may deter potential buyers.

Although the ongoing trend of low home loan rates is expected to continue throughout 2022, rates are predicted to climb slightly above last year’s rates.

The good news is, although fixed rates are rising, variable rates are less likely to rise significantly until the cash rate lifts later down the track.

The RBA has revealed that a cash rate hike is plausible for late 2023.

If you’re interested in purchasing a home or refinancing your existing home loan, speak to your Aussie Broker. They’ll be able to guide you every step of the way in securing a great deal for your lifestyle and needs.

Housing affordability continues to crumble

Housing prices continue to climb month-on-month, making housing affordability more challenging.

According to CoreLogic, the ratio of housing values to household incomes reached a record high in June, as did the number of years it takes to save a deposit.

First homebuyers faced tough barriers entering the property housing market this yearwith Domain reporting high search volumes in 2021 for keywords like ‘duplex’, ‘dual’ and ‘unit’. These clues may be key indicators of slowing housing demand in the coming years.

With the dream of being a homeowner drifting further away from reach for many households, we may see an uplift in demand for more affordable and higher density housing like townhouses and units.

How will the 2022 property market shape up to 2021?

Although the property market remains healthy, the heavy activity we’ve seen in recent months is likely to slow following the selling boom of 2020 and 2021.

Buyer demand remains high but has eased off slightly towards the end of last year.

Additionally, an influx of listed properties towards the end of 2021 provided prospective buyers with greater choice than they had in the first 3 quarters of the year.

While the easing of restrictions will continue to support property markets around the country, these changes are minimal compared to the shift we saw earlier in the year.

2021 end-of-year roundup: Australia’s major cities

Sydney

  • The total number of property listings rose 12.3% month-on-month – Sydney’s highest level in over two years.
  • In regional NSW, total listings rose 8.4% month-on-month.

Melbourne

  • The total stock of properties for sale reached its highest level in three years, up 6.7% month-on-month.
  • Total listings in regional Victoria were up 7.9% month-on-month but remain more than 20% below levels just over a year ago.

Brisbane

  • The total stock of properties for sale grew 6.9% month-on-month.
  • Regional Queensland saw the strongest month of new listings in five years, with new listings up 9.5% month-on-month in November.

Adelaide

  • New listings in regional South Australia increased 17.4% month-on-month, their highest level since 2016.
  • Total listings in Adelaide increased 11.8% month-on-month in November to their highest level in 6 months.

Perth

  • Buyers in Perth enjoyed the highest level of new listings since 2014, as new listings picked up 14.8% month-on-month in November.
  • New listings in regional WA also picked up significantly – rising 14.9% month-on-month to their highest level since 2015.

Hobart

  • New listings in Hobart jumped 42.4% month-on-month in November to their highest level since the beginning of the COVID-19 pandemic.
  • New listings in regional Tasmania picked up 18.4% month-on-month in November.

Darwin

  • New listings in Darwin only rose only 0.4% month-on-month in November but remain much stronger than in 2020, up 68.9% year-on-year.
  • The overall number of properties available for sale in Darwin rose 0.9% in November and declined 2.4% in regional Northern Territory month-on-month.

Canberra

  • New listings in Canberra rose 22.1% month-on-month in November.
  • Total listings were up 15.4% month-on-month in November. The total amount of listings has picked up more than 50% from low levels affected by the pandemic in August.

Predicted property trends for 2022

Brighter buying opportunities

Appraisals in 2021 grew significantly from the previous year, suggesting homeowners may be considering selling their properties early this year. The influx of new listings is predicted to hold strong in the next few months into autumn.

According to Domain, this increasing number of options, as well as stricter lending conditions and slow wage growth, may mean prices won’t rise as rapidly as they did last year.

Investor boom

The investors market is predicted to grow across major cities and regional Australia unless APRA pulls the brakes.

Investors have enjoyed rising rental yields and equity growth and will continue to benefit as prices are set to increase.

Areas that have a greater rental demand from overseas migrators, such as inner Melbourne and Sydney’s city and east, may be affected by a tightening rental market.

A new way (and location) of working

Transitioning into 2022, Australians will likely continue seeking out and migrating to the coast and other locations farther away from major cities.

Housing prices in Somers, Victoria rose 69%, Byron Bay in New South Wales rose 58% and Sunshine Beach in Queensland rose 48% over 2021.

Buyers will search for coastal areas that are still affordable and have potential for future growth.

 

As we head into the new year, your local Aussie Broker is here to answer all your property and home loan questions. Achieve your 2022 homeowning goals this year. Just reach out to chat and we’ll help make it happen.

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