Despite all the challenges we experienced in the last couple of years and a sequence of lockdowns, the housing market in Australia encountered a once in a generation boom in real estate prices in 2021.
And yet the pace of house price boost is slowing, and APRA (Australian Prudential Regulation Authority) is willing to see housing markets slow down, property values growing every market around the country.
We came across many potential buyers asking will the housing market crash in 2022? How long can this last?
What To Expect From The Housing Market In 2022?
1. We May Have Two-Tier Property Market
It means not all locations will continue developing strongly moving forward. Moreover, many experts speculated that properties in inner and middle-ring suburbs notably outperform more affordable properties in outer suburbs.
While the cheaper end of the markets and outer suburban have performed firmly so far, affordability is becoming a concern as the locals have had the lowest wages growth when housing market prices have boomed.
It is projected there will be an increased emphasis on quality properties and liveability.
2. Continued Property Price Growth
The property’s value will keep growing in 2022, though not everywhere and not to the same upward slope as they have over the last couple of years.
We are steering towards robust economic growth, high consumer and business confidence, creating more jobs.
In a nutshell, it is far-fetched that we will continue to witness the same growth rate over the next two years that we have seen over the past couple of years.
3. Rents Will Rise Strongly
Rentals continue to rise throughout 2022 due to meagre vacancy rates and increased rental demands.
Despite the lack of immigration, the following stats indicate how the rentals rose.
Source: SQM Research
And, as growing house rentals will make affordability issues for several tenants, apartment rentals will also rise in 2022.
Two Cents
The real estate market will maintain a substantial supply of homes. Australians will be spending their funds differently than in the last two years, which inspired people to sell, renovate and upgrade their property and in due course, interest rates will grow.
Whether the housing market will just experience stop dead or slower growth in the tracks will base on what actions are introduced.
