The property market in Australia has been tumultuous lately, and it looks like the trend of unpredictability will continue.
Over the last two years, we have seen surprising price jumps, interest rates at all-time lows and homes selling in record times. So what will the rest of 2022 bring?
It’s not easy to say for sure but the following factors will influence demand, prices and the selling/buying experience:
The return of the travellers and students
Travellers, immigrants, and international students are now returning to Australia. With an influx of international visitors, the rental market is expected to face greater demand.
International arrivals will be looking for rental properties in great numbers, so now is the perfect time to invest in a smaller property. Find a quality property that is close to hospitals, entertainment venues and universities, and you should have no problem finding tenants.
Renovating is a challenge in 2022
Because of record-low interest rates and high property prices, many Australians have been taking out loans to renovate their properties instead of selling to upsize.
This has put the building and supplies industries under a lot of pressure. And the rise in demand is coupled with global shortages in labour, shipping and availability of materials. As a result, many projects have been delayed.
If you need a larger place, it may be a better option to buy a new home than to try to renovate. At least this way, you can upgrade without worrying about supplies and contractor availability.
Price fluctuations
The pandemic has made property prices harder to predict than ever.
Many forecasters believe that house prices will grow much more slowly in 2022 than last year. Some pundits even expect prices to start falling in 2023 and 2024.
The very early months of this year saw prices climbing but it’s hard to know what will happen next. It really comes down to the demand in your specific area, so keep in touch with your local real estate agent to hear the latest updates.
Interest rates
Interest rates are at record lows but the Reserve Bank is warning people to prepare for a hike. If you’re a homeowner or you’re planning to buy, factor a higher rate into your budget. You’ll be grateful for the breathing room when the change does come.
On this subject, now may be a good time to consider refinancing and fixing at least part of your mortgage.
Is now the time to buy?
This is the question that real estate agents hear time and time again. The very short-term answer depends on where you want to buy and your personal circumstances. If you need to buy, you need to buy. The best thing you can do is spend time on research, talk to your agents and make sure you pay a fair price.
Property prices have a ‘rollercoaster’ trajectory in the short term but if you buy well, over time the value of your home is almost guaranteed to go up. This means that yes, 2022 is a great time to buy a house.
Need more help to understand the current property market in your area? Contact me today.
