Property Market Update – Welcome to January 2022

Hello 2022! We hope you enjoyed some quality time with family and friends over the Christmas and New Year break.

In December, we saw auction activity go gangbusters, with capital city auction volumes through the roof. With more stock available, it may leave you in a better position to negotiate on price.

If you’re planning a property purchase, talk to us about pre-approval and we’ll help get the ball rolling.

Interest rate news

The Reserve Bank of Australia (RBA) will hold its next meeting to decide on the cash rate on February 2, 2022.

Last year, the cash rate remained on hold at the historically low level of 0.10%.

Based on recent commentary by RBA Governor, Philip Lowe, it would appear unlikely the RBA will change the cash rate anytime soon.

Having said that, we’ve seen some lenders increase fixed-rate loans recently, so it’s a good idea to shop around. If you’d like to explore your mortgage options in 2022, please get in touch.

Home value movements

Last year, the Australian housing market experienced an unprecedented year of growth.

CoreLogic’s Head of Research, Eliza Owen, said the estimated value of Australia’s residential real estate increased from $7.2 trillion at the end of November 2020 to a record high of $9.4 trillion in just 12 months.

In addition, sales volumes soared to the highest level in almost 18 years, while property values nationally increased 22.2% in the 12 months to November – the highest increase since 1989.  “Strong housing market performance over the year was driven by multiple factors, including low interest rates, fiscal and institutional support for households, high household savings and relatively low levels of advertised stock,” she said.

“Rates of housing turnover had also been relatively low for some years before these factors boosted housing demand, which may also explain the elevated volume of sales in the past 12 months, which at November was 32.6% above the decade annual average.”

* Monthly Home Values figures as of 31 December, 2021
* Australian auction results, clearance rates and recent sales for the week ending 9 January, 2022.
* The clearance rate is preliminary and current as of 01:50 pm AEDT, 10 January, 2022.

What’s ahead in 2022

The final months of 2021 saw housing values move through the fastest rate of annual growth since the late 1980s at a time when wages and household incomes hardly moved. Considering the housing affordability situation, and with a federal election to be held this year, home ownership and housing affordability are likely to be hot political topics across the major parties.

COVID remains the biggest wildcard, especially given surging case numbers related to the Omicron strain. A return to restrictive policies, especially those that prohibit movements or home inspections, would result in a new phase of temporary disruption to transaction activity. This may prolong expansive monetary policy and low interest rates, which helped sustain housing demand through 2021.

Make your first step – we can help!

Ready to make your dream of buying a home or investment property a reality? Please don’t hesitate to give us a call and we can support you along every step of your home-buying journey. Get pre-approved on your finance and start the property hunt today!


Additional sources
CoreLogic RP Data Daily Home Value Index: Monthly Values

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