In 2021, property markets across Australia grew strongly, but will this trend continue into the new year?
A property expert and buyer’s agent advises purchasers to be more smart in their purchasing decisions over the year because recent national growth trends won’t continue at the same rate.
According to Arjun Paliwal, the founder and Head of Research at InvestorKit, Australia had an unexpected property growth in 2021 as families saved more money.
Despite the fact that predictions indicate that the country’s rising real estate market may not last, the long-term impact is still uncertain.
While the prices in real estate increased and the supply in capital cities remained low, the buyer demand on realestate.com.au reached an all-time high as a result of government incentives.
We have here below Property Predictions for 2022 as summarized by www.news.com.au.
The following are the top seven property trends for 2022:
1: First home buyer activity will decline
The volume of enquiries from buyers, typically owner occupiers, fell by 21.6 per cent in August 2021.
Despite this, interest from first home buyers and investors peaked with large monthly increases in enquiries.
“As property prices rose to such high levels this year, many first home buyers have been priced out amongst major markets. The biggest challenge for those looking to buy in 2022 and beyond will be their home deposit. While money remains cheap, benefits on offer with price caps attached aren’t very possible to stay under due to price growth”
2: Property prices will be demand-led rather than supply-short
Property price growth in early 2021 had one common factor: markets had low stock which led property prices to shoot up.
Mr Paliwal says many locations will see growth rates reduce as listings return to ‘more normal’ levels.
“Many areas carry a multitude of reasons for their respective cycles to continue: localised strength in their economies, the continuation of the exodus, affordability, weaker last 10-year rates of growth paving way for a greater cycle length and high current market pressure. These areas are expected to be the majority when counting the total number of cities in Australia seeing high demand.”
3: The seachange and treechange will continue as Aussies bring forward their retirement plans and continue flexible work
Homebuyers desperate to escape the city post-lockdown decided to make the move to both the coast and regional areas.
The bid entices people away from the city and also brings less traffic and creates more jobs in regional areas with a more flexible life balance.
“The pandemic made people rethink their living situations and seek a better lifestyle sooner. We saw people try different tactics to achieve retirement earlier by downsizing or investing. It’s not a new trend – it simply became supercharged during lockdowns – and will continue at higher than previously seen levels.”
4: Borderless buying will become the norm as investment decisions increasingly become driven by data.
Being well informed about markets helps investors spot opportunities quickly. While there will always be opportunities in capital cities to make a profit, savvy investors are getting outside their comfort zones and looking further afield.
“The concept of virtual buying has been around for some time, but it has accelerated during the pandemic and through greater professional presence of buyers agents to make it easier to buy outside one’s own city or state and ease buyer’s concerns.”
5: Growth won’t occur at this pace again across all markets, there will be variances across micro markets
“Unlike in 2021 when property markets across all of Australia increased, it’s important that investors don’t go into 2022, thinking that they can just buy anywhere and the same upward trends will happen again. Each micro market will have its own factors influencing growth.”
“The last time growth occurred on a national scale in this similar fashion was 2000 to 2004.”
6: Apartment rental vacancies will trend down and add pressure on rental prices
As international borders reopen and skilled labour immigration and international students return, apartment rentals will recover as younger immigrants are more used to overseas apartments.
7: More people will buy property through their self-managed super fund (SMSF)
As long as the market and interest rate remains competitive, investors will have the opportunity to take charge of their own financial future.
If this year you are gearing towards investing in properties and would like to know what options are available to you, book a FREE CONSULT CALL with our Professional Property Specialist at Micah Finance Solutions.