Following on from 2021’s strong property market, 2022 is set to show signs of slowing. Despite this, property prices may continue to rise or even exceed long-term trends however, it will likely not be at the same excelled rate we saw throughout last year.

With covid restrictions easing, the probability that we will be plunged back into strict isolation again is unlikely. This means that the drive we saw for more regional properties and homes with more space during the height of covid will now decrease slightly as people start moving back into the city and its surrounds.

The last quarter of 2021 also experienced an increased number of listings, with November recording a decade high which continued into January of this year. It is expected that this increase will stay consistent throughout the first half of 2022, balancing out the supply and demand fueled prices we recently witnessed.

During the immergence of covid in 2019 and the effects it had on our back pocket, lenders removed previous macroprudential controls that were in place to limit the amount buyers could borrow. This easing assisted in the surge of buyers we experienced over the next few years and in turn, the increase in property prices as the demand for homes far outweighed actual listings.

As of October 2021, the Australian Prudential Regulation Authority reintroduced macroprudential controls on lending, assessing buyers’ ability to repay a mortgage by increasing the buffer to 3 percent above the current interest rates. While macroprudential policies do not directly impact price growth, housing credit growth is a targeted consideration and at present, it is continuing to grow at a rate far surpassing household incomes. If this climb continues its current trajectory, stricter policies may be introduced which could limit the number of buyers who are able to borrow, or the amount they are capable of borrowing, creating a decline in demand and slowing price growth.

While a lot of research and consideration has gone into these predictions by leading property experts, they are of course only predictions. It is impossible to tell the future with any certainty. What we do know is that here and now, property prices are still at an all-time high and buyer demand is still going strong. If you would like to find out what your property could currently achieve, please get in touch with our experienced sales agents to arrange an obligation-free appraisal.  

Blog written by Cara King
*data and information obtained from realestate.com.au