IT’S NOT OVER YET
The property boom that swept Australia in 2021 is no short-term spectacular. This up-cycle has longevity and sustainability.
We may not see the same level of price growth overall in 2022, but there will be substantial uplift in property values again. The difference in 2022 is that markets will be segmented.
Indeed, 2022 promises to be a fascinating year in real estate. Last year was relatively straightforward because, in simple terms, prices were rising pretty much everywhere. Around 98% of locations across Australia recorded price uplift; most had double-digit growth and many places rose by more than 20%.
This year is shaping as a more “normal” market, where some locations are rising strongly, some are rising moderately, some are marking time or stagnating, and a few are falling. This is because markets are essentially local affairs. Outcomes are dictated by local economic conditions and these tend to vary from one place to another.
In 2022 we will see a variety of scenarios. While there has been a nationwide property boom over the past 18 months, some locations have had strong markets for much longer than that.
In the coming year, some of the locations that have had major price growth for the past four or five years will start to fade. Hobart, Geelong and the Sunshine Coast are examples.
But many other places are just getting started on their growth cycles and will continue to deliver big price increases in 2022 and beyond. These include rising cities like Brisbane, Adelaide and Perth, as well as buoyant regional markets, including those in NSW, Queensland and Western Australia.
The current property upcycle has been generated by multiple factors and many of those will still be in play in 2022, as well as some new ones. If international borders reopen and stay open, overseas migrants and international students will create another wave of demand.
