Another Stellar Year in 2022: House Prices Set to Increase by 12%
After a stellar 12 months during which property prices rose 22.1% across the country, the momentum is expected to continue into 2022.
Across the country, property prices rose 22.1% over the past 12 months – a stellar result for property investors. The moment is expected to continue into 2022.
Some capital cities may see up to 12% growth, according to the the latest PropTrack Property Market Outlook 2022 from REA. This means homeowners likely have more gains to look forward to in the year ahead.
As low interest rates and strong demand keep the housing market drifting higher, the big winners this year stand to be Hobart (9–12% predicted growth), Brisbane (8–11%), Canberra (6–9%) and Adelaide (6–9%), according to the report.
Cameron Kusher, REA Group’s Executive Manager of Economic Research, says that some of the smaller capital cities are continuing to outperform at the moment. “Brisbane and Hobart have the strongest price growth forecasts among the capital cities thanks to their low supply of stock for sale, heightened demand and relatively lower prices compared to Sydney and Melbourne.”
Property prices are also predicted to increase in Sydney (4–7%), Melbourne (4–7%), Darwin (5–8%) and Perth (3–6%), as per the REA report.
Kusher continues, “Perth has shown a stronger slowdown in price growth already relative to other capital cities, while the more expensive property prices in Sydney and Melbourne may increasingly see demand shift to more affordable housing markets.” He explains that as more listings hit the market, the overall rate of growth won’t be as high as in 2021, giving buyers greater choice.
“The recent lift in new listings should go some way to allow more buyers to find a home,” he adds. “After that, the question will be … how large is the next wave of buyers? We believe this next wave is likely to be big, but not as large as the current one, so that should result in a better supply and demand balance. We expect a smaller wave of buyers because prices have increased, rapidly pricing some buyers out.”
Mr Kusher also expects some changes to the property market with the return of international travel. “With investors returning to the market and credit tightening having commenced, we may see a pick-up in demand and price growth for units relative to houses over the coming years. Especially given their prices are now significantly lower than the price of a house.”
“Other factors such as the reopening of international borders and the return of migrant workers and international students may add to demand,” he adds. “Inner-city living also became relatively less attractive to many while COVID lockdowns and other restrictions were in place, as the economy reopens and the CBD springs back to life, this trend may reverse somewhat.”
This article is intended to provide general information of an educational nature only. It doesn’t take into consideration your personal financial situation and should not be relied upon as financial advice.
