What Will the Property Market Do in 2022?

Are you one of the many Australians who are wondering how the property market will unfold in 2022? Are you looking to buy or sell a home, but want to make sure you pick the right time to maximize your return on investment?

If you’re watching the real-estate market keenly, you’re not alone. 2022 will be a big year in the housing game so it’s worth keeping your finger on the pulse. Some of the changes we’ve witnessed over the past two years have taken us
by surprise so it’s very important to keep focused and stay tuned for what’s coming this year.

But before we move onto forecasts for the next 12 months, let’s just take a quick look back at 2021:

Despite lockdowns across Australia, the property market remained hot all throughout 2021. In fact, according to Knight Frank’s Global House Price Index, Australia came in 5th place for global house price increases!

High demand and low inventory levels combined to drive prices up in all capital cities and rural areas. Despite extended restrictions and circuit breaker lockdowns, Melbourne’s property market was no exception; prices skyrocketed with the typical city home stacking on an astonishing 15.1% throughout 2021. Historically low-interest rates and the rollout of government stimulus packages helped to put homeownership within the reach of thousands of Australians and served to fuel the fire of demand. In short, 2021 was a seller’s market, with buyers pivoting to larger, family homes in suburban areas.

Moving on to 2022…

Prices Will Remain High
The year has started strong. Traditionally, the property market is slower in the first few weeks of a new year, but according to an article published by CoreLogic, January this year has seen a high number of properties sold under the hammer already. This shows that there is still heat in the market.

Many property forecasters are predicting that Victoria’s housing market will continue to soar to new heights during 2022. Yes, some of the government stimulus packages have now expired and affordability is becoming an issue in some sectors as prices go up, but interest rates are expected to remain low for the foreseeable future. And with a strong backing of forecasted economic growth for Australia, consumer confidence is high.

Tree Change/Sea Change – will this continue?
For many Melbournians, the COVID19 crisis proved to be the catalyst for a complete lifestyle change and office workers are well established in their work-from-home arrangements so they have taken (and are still taking) the opportunity to make a sea or tree change. This trend is expected to continue throughout the coming year, although we may see a slight decrease in demand. In Melbourne’s outer suburbs, large family homes with good-sized gardens, larger living areas and enough room for a home office will continue to be popular.

Federal Election – will that affect the market?
To be realistic, we can expect the pace of real-estate to slow somewhat in the leadup to the federal election at the end of the year. But keep it in perspective; the market is moving at a very fast pace and a slight slowing towards the latter end of 2022 is nothing to worry about.

The Rental Market – will this pick up?
Yes, the rental market is set to make a comeback. As the country continues to open its borders and international migration returns, the demand for units and rental properties in Melbourne is forecasted to bounce back.

In short, the property market is forecasted to remain strong throughout this year and some industry experts expect that prices will rise anywhere between 12 – 14% for freestanding homes in Melbourne. However, more listings will reduce the competition somewhat because buyers will have more choice. The team at Love & Co are right up there with what’s happening on Melbourne’s real estate front. And we love helping our clients realize their goals and get the best bang for their buck.