The Australian real estate market saw extreme growth in 2021, making it another year for investors and sellers. While 2022 will continue to be the seller’s year, trends in the market are changing.
If you’re a real estate investor or thinking about Australian real estate for sale, then you’ll want to keep reading. We’ve got the inside scoop on three important trends to look for in 2022.
Slower Growth and Smaller Market
The National Australia Bank projects the Australian real estate market to continue to grow in 2022 but only by about 5%. Compared to the record-breaking growth of 22% in 2021, this means 2022 will see a huge slowdown in the market and prices.
The slowdown is the result of the ongoing COVID-19 pandemic as well as shifts in interest rate trends and industry regulations.
To start, Australians continue to face income losses and financial constraints due to the pandemic. This means that either fewer people have the means to buy or they are waiting until they are more financially secure and the economy recovers.
Secondly, there has been a rise in fixed mortgage rates contributing to less eagerness to buy Australian real estate.
In addition, tighter lending conditions went into effect on November 1, 2021. The prudential regulator’s serviceability buffer bumped from 2.5% to 3%. So, banks are now using higher serviceability rates when evaluating buyers’ abilities to repay their loans.
This new rule is expected to lower the average loan amount for buyers and make it more difficult for people to be approved for financing. This, of course, means there will be fewer people buying homes and at lower prices.
Urban Migration and Multiunits
During lockdowns and stay-at-home orders, Australians flocked to the suburbs and countrysides.
Now regulations are being lifted, borders are opening to tourists, people are returning to the office, and students return to school. As a result, people are returning to the city and looking for homes in multiunit buildings.
The hottest Australian real estate for sale will most likely be urban apartments, condos, and rowhomes. People will be looking to live where they can work and play all within a short distance of home.
So, if you’re looking for property investment opportunities in 2022, look into urban real estate; Sydney Australia real estate, real estate Melbourne Australia, and Brisbane Australia real estate, for example.
Comforts, Space, and Location
While people begin to migrate back to the cities, many will continue to work from home. Buyers will be looking for properties that are comfortable and spacious but also in a location where they can enjoy spending all of their time.
Folks working from home will want properties with offices or extra bedrooms, as well as outdoor space such as a yard, patio, and/or garden.
Location will be one of the biggest selling points. People will be willing to pay more for a place where they are close to all their needs including social spaces.
Stay Up-To-Date on Australian Real Estate Trends
The Australian real estate projections for 2022 include a slower market, lower prices, urbanization, and all-in-one properties for sellers. Yet, these trends are only projections.
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