Real Estate with Benjamin Waite

What's Ahead for Property Values in 2022?

Latest Property Price Forcasts for 2022 Revealed

It’s the question we are all asking… 

Now that our housing market has transitioned from the ‘housing boom’ generally characterised by a strong and broad-based rise across the entire nation of Australia, to one best-described as utterly inconceiveable.

At one end of the spectrum are Australia’s two largest cities, Sydney and Melbourne – who are recording flat to falling housing values, and on the other end is Brisbane and Adelaide, where movement in growth continues to rise at an annualised pace of more than 20% per quarter!

Now you may have heard the rumours, and many potential buyers may be asking “How long can this last? Will the property market crash in 2022?” 

If we are using the past few years as a guide, we can all agree that it is difficult to make predictions in upcoming market trends with the fickle nature of external forces that have influenced the housing prices in our area.

That being said, I have prepared a few points that I think weigh in favour of a continuing escalation in property prices moving into 2023.

See the reverse where I will share a number of property predictions that just make sense moving forward…

1. Property demand from home buyers is going to continue to be strong

Last year when home prices surged around Australia the media kept reminding us that we were in a property boom.

The result was that emotions were running high and FOMO(Fear of Missing Out) was a common theme around Australia’s property markets.

Now that overall growth is slowing (not going backwards, just slowing) there are still more buyers in the market for homes and investment properties than there are properties for sale, and this will underpin home values moving forward.

2. Investors will squeeze our first home buyers

While there were many first-time buyers (FHB’s) in the market in 2021, floated by the many incentives being offered to them – the demand is now fading as property investors re-enter the market and property values rise.

Investor lending has been low in the last few years but with historically low-interest rates and easing lending restrictions, investors are back with a vengance.

3. Property Prices will continue to rise

The main drivers of property price growth are consumer confidence, low-interest rates, economic growth and a favourable supply and demand ratio.

Once we get the influx of migrants and international students that the government is encouraging to return to Australian shores there will be an increase in demand for City apartments, and accommodation around universities.

Overall, the low mortgage rates continue to underpin very strong growth in property prices throughout the country.

4. ’20 Minute’ Neighbourhoods are the new waterfront

If COVID taught us anything, it was the importance of living in the right type of property, in the right neighbourhood.

In our new ”Covid Norm” people will pay a premium for the ability to work, live and play within a 20-minute drive, bike ride or walking distance from home.

Such things as shopping, business services, education, community facilities, recreational and sporting resources all within arms reach of their home.

5. This is a cycle dominated by upgraders.

The current property and economic environment means that after the past year of restrictions and lockdowns, Australians are now looking to upgrade their lifestyle. 

This now means that; 

Tenants are no longer happy to live in small dingy apartments,

Other tenants who have managed to save a deposit are taking advantage of the incentives available to first home buyers, 

Record low interest rates and surging markets mean existing homeowners are upgrading their accommodation. 

Many of our elderly homeowners are looking to upgrade by moving out of their old, tired family homes into apartments or townhouses 

– but instead of a sea change or tree change, they’re keen to live in ’20 minute neighbourhoods close to their family and friends.

"The best investment on Earth, is earth."

- Louis Glickman, American Business Executive

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Market Download…

Professional Opinion by Benjamin Waite

In case you’ve been living under a rock for the past month, rising interest rates have been a hot topic of conversation with whispers of a significant rise in the near future.

 

Finally, the Reserve Bank of Australia have got off their hands and lifted the cash rate. While the increase to 0.35% may be miniscule in comparison to the sky high interest rates of the 1980’s – with our property values at an all time high there is concern for the future of mortgagees, and what lies ahead for the Australian Property Market.

 

My thoughts are, that although it appears that interest rates are on the increase relatively speaking, an astronimical rise won’t happen overnight like the behaviour we have been seeing in values over the past 12 months. Buyer demand is still very real, and with the current election fastly approaching, both candidates have promised a multitude of concessions and grants for first home buyers to contribute towards the current housing affordability issues we are facing as a nation.

Based on these concessions, I feel that within the Beenleigh corridor, demand will remain relatively strong but value growth will slow significantly, causing slight extensions to Property ‘Days on Market’ for anything less than A Grade properties.

This will provide an avenue for the Buyers to negotiatiate on purchases, instead of the fear-based ‘panic buying’ we have witnessed recently.