2022 Property Trends

Amelia Hetherington from Mozo asks our opinion on property trends to watch this year.

https://mozo.com.au/home-loans/articles/looking-to-buy-a-home-you-ll-need-to-know-the-property-trends-of-2022

There are a lot of things being predicted for the property market this year. The current climate of uncertainty surrounding interest rates and how this may affect the future of property prices, has caused increased buyer hesitation in the hopes that they will get a better deal in the near future. Other predictions for 2022 include the continued lack of housing stock and increased popularity of moving from city to regional areas.

Rates loom large. Commbank and AMP have predicted an official rate increase will occur in November of this year and Westpac, ANZ and NAB have individually predicted various times in early-mid 2023.

Any uncertainty has caused a lot of doubt in people thinking of buying property, resulting in increased buyer hesitation.

Experts have suggested, however, that a fear of missing out still plays a role - both in picking up a new home and sitting on the sidelines too long and missing a chance to capitalise. Let’s take a closer look at the current situation and trends that follow.

Interest rates - on the rise?

In addition, due to the link between interest rates and property, there is a possibility of a decrease in prices if interest rates rise. This has resulted in more people holding off on buying in the hope that they might get a better price in the near future.

According to CoreLogic’s director of research, Tim Lawless, there is currently a slowing trend in value growth in “every capital city and broad ‘rest of state’ region.” Sydney recorded a small decrease in February, the first decline in housing values since September 2020.

Housing supply versus demand

The lack of housing stock is a growing concern and is likely to result in the rise in property prices. According to CoreLogic, “the total number of properties advertised for sale over the four weeks ending 27 February was 13.3% lower than the same period a year ago.”

This trend is also evident in Brisbane and Adelaide where total listings are 20% lower than a year ago and 40% lower than the previous five-year average. These statistics show that the housing stock shortage is a big problem across all areas of Australia. Lawless explains that the more choice in available real estate translates to less urgency for buyers and some empowerment at the negotiation table - something that buyers do not currently have. It is expected that the combination of limited housing stock and continued increase in land price will make knock-down rebuilds more popular than ever over the coming year.

Regional property options

In addition, since lockdown, companies have become more flexible and willing to let people work from home a few days a week, meaning that increasing numbers of people are looking to buy in more rural areas.

This trend has already resulted in rising rural property prices. Lawless further explains the reason for the rural price increase; “demographic tailwinds, low inventory levels and ongoing demand for coastal or treechange housing options are continuing to support strong upwards price pressures across regional housing markets.”

Founder and mortgage broker at Two Red Shoes, Rebecca Jarrett-Dalton believes that “this is a really interesting trend to watch” because people may begin to tire of country life or be recalled to metro offices sometime in the near future. She also believes that despite the rising rural house prices, there are people who are willing to change roles if they are forced to give up flexible working arrangements in order to keep the lifestyle and additional space that regional living offers.