'Light at the end of the tunnel' for property buyers in 2022

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on December 09, 2021 Fact Checked
'Light at the end of the tunnel' for property buyers in 2022

Buyers are set to feel the reprieve of a market cool down in 2022, with Domain forecasting 'bright' opportunities ahead.

Following Australia's record-breaking housing boom in 2021, relief is on the way for buyers in 2022 as the house price growth rate continues to cool off at the back end of the year.

Despite easing buyer demand, Domain's End of Year Wrap Report noted all capital cities bar Hobart ended spring 2021 higher than the three year average. 

Domain notes the traditional spring to summer real estate dip brings with it an average drop of 11% over the past three years, however the start to summer this year has been unusually strong.

Chief of Research and Economics at Domain, Dr Nicola Powell, said the year is closing in a different position to the start with sellers re-engaging with the market and increasing supply. 

"While it remains a sellers' market, slowly market dynamics are changing to provide more favourable conditions for buyers,” Dr Powell said.

Moving into 2022, buying opportunities are looking bright with Domain’s report noting appraisals soared across the final quarters of the year.

This indicates that a number of homeowners are considering the state of the market and listing their properties for sale in the new year.

Domain notes similar predictions to the big four banks, with prices not expected to rise at the same pace next year.

This comes off the back of tighter lending conditions reducing buyer leverage and wages growth not keeping pace with price growth.

Trends forecast for 2022

Coastal locations are tipped by Domain to be the areas most sought after by Australians, honing in on areas that are affordable and poised for future growth in 2022.

This is reflective of property trends throughout 2021, with beaches, pools and waterfront locations the idyllic property features Australians crave. 

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Source: Domain 

Dr Powell says investors will continue to be a growing market segment, unless APRA puts on the brakes.

"Investors have had the benefit of rising rents and equity growth, with prices set to continue to rise - albeit at a slower pace
than 2021 - investors will continue to chase it," she said.

"It remains a landlords’ market across the most major cities and into regional Australia."

Domain reports regions such as inner Melbourne and Sydney’s City and East historically have a high level of overseas migration and student population, yet will be susceptible to a tightening rental market once international borders fully reopen. 

Dr Powell notes population growth is likely to be a government focus in 2022 and beyond to sustain higher economic growth and build Australia’s skilled workforce. 

"The return of overseas migrants, international students and particularly skilled highly-paid migrants, will add to demand for housing," Dr Powell said.


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Rates correct as of January 17, 2022. View disclaimer.


Image by Susann Schuster 

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Jacob Cocciolone joined the Savings team in 2021 as a Finance Journalist. Driven by a passion for keeping Australians up to date with the latest financial news and trends, his areas of interest include financial technology, investing, property and motoring.

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