In 2022, property prices are expected to remain high due to demand in selected areas. Rental vacancies for apartments are expected to decline with the opening of international borders. For first home buyers, activity is likely to decline in major cities.
The following are the seven property forecasts for 2022:
- Decline in home buyer activity
Property prices rose significantly this year, causing many first home buyers to be priced out among major markets. For those looking to buy in 2022 and beyond, the challenge is their home deposit. While money will be relatively easy to come by, the available benefits with price limits attached make it impossible to stay under because of price growth.
- Prices will be demand-led instead of supply-short
Growth rates in a number of locations will be reduced as listing levels return to normal.
There are various reasons for the respective cycles of many locations to continue. These include localised strength in their economies; the persisting exodus; affordability; lower rates of growth in the last decade, leading to a longer cycle rate and high present market pressure. These areas will experience high demand.
- Continuation of change as Australians retire and continue with flexible work
People wanting to get away from the city post-lockdown made a decision to relocate to either the coast or regional areas.
Because of the pandemic, people were forced to re-assess their current living situation and improve it. People are either downsizing or investing to achieve retirement earlier. It’s not something novel – it simply became obvious during the lockdown – and will continue at higher than previously recorded levels.
- Borderless buying will become common
Investment opportunities in capital cities will always be there, but smart investors are outside of those locations. Virtual shopping is not a new concept, but it became popular during the pandemic. With the help of professional buyers’ agents, it has become easier to buy outside of your own city or state and ease your concerns.
- Various growth levels across micro markets
Investors should remember not to just buy anywhere in 2022 because the upward trend seen last year may not happen. Each micro market will have different factors shaping their growth.
It was 2000 to 2004 when growth occurred across Australia in similar fashion.
- Apartment rental vacancies will decline and further burden rental prices
With foreign borders reopening and skilled labour migration and foreign students coming back, apartment rentals will improve as younger immigrants become more used to overseas apartments.
- More homebuyers will purchase using their self-managed super fund (SMSF)
Providing the market and interest rate continue to be competitive, there will be opportunities for investors to drive their own financial future.