If you watched property prices rise more than 20% across the nation last year, you’d surely be wondering whether this increase in values can continue at such an incredible pace.
Reading the tea leaves for the 2022 property market, it’s hard for even an experienced real estate agent to believe history can be repeated. But prices don’t have to grow at double digits to remain strong. Even more modest growth is great news for property owners.
Property owners have had an incredible 12 months, and it is only natural for a modicum of calm to be restored. However, industry researcher CoreLogic predicts overall values will continue to increase in 2022.
If you’re thinking of climbing the property ladder, investing or downsizing, you’d be wise to watch the early trends of 2022.
Do not be overly influenced by national events. Instead, focus on what’s happening in our local area. Before deciding to buy or sell, always consult your local real estate agent for a picture of buyer demand and price trends.
As an experienced agency, we believe we’ll continue to see strong buyer demand. However, the dynamics of the economy, a national election looming and increasing concern for the wellbeing of our society because of Covid will create a more cautious environment.
Here are some of the major trends for 2022 that we believe might influence residential property prices.
1. Supply is key
Local factors will influence prices more than national economic issues. The size and quality of local housing stock for sale will be critical. Remember, Australia is not one massive real estate market but thousands of micro-markets, each with characteristics that influence time-on-market and prices so watch the local data.
2. Buyer caution
Buyers will pull back from owners they regard as “trying to cash in”. If you’re selling in 2022, you should price your property realistically. Just because property prices have jumped by double digits over the past six months doesn’t mean it will be repeated in the coming months. Homes go stale if they hang around on the market from being overpriced and will be avoided by buyers.
3. Rate rises
Money is expected to become more expensive. While the Reserve Bank is holding off on interest rates, the banks themselves are not. Increases in the rate will be slow and unlikely to make a dramatic impact. Many buyers will have already factored in this risk but it’s worth watching.
4. Virus unknowns
Omicron and any variants that might follow remain the great unknown. Governments are making it clear we should live with the virus, and the economic stimuli provided previously is no longer available. Ultimately, how this virus affects the property market in 2022 is the wild card but in our favour we have the fact that we’ve sold through lockdowns and the pandemic before so in many ways, it’s business as usual.
5. Election in the wings
The economy and property market often holds its breath when an election is in the wings and there’s no doubt that the Federal election in May is going to be an important one. If you are thinking of selling, don’t let the antics of those in Canberra affect your decision. There will still be buyers out there and while the market may quieten for a spell, an election is extremely unlikely to undo the major gains the property market has achieved over the past 12 months.
If we can help you sell your current home, please do not hesitate to contact us. We can discuss local sales trends, buyer demands and marketing plans designed to deliver the best possible price in every possible market.