5 major property trends to watch in 2022

Following a rocky 2021, 2022 is already rewriting the history books. Everywhere you turn, records are being broken, from home prices to interest rates to refinancing. We'll take a look at why property market sentiment is so strong today.

What a difference a day can make. Many well-known economists at the time predicted that COVID-19 would cause home prices to drop. They’ve taken a step backward now.

House prices might grow by 30% in the next three years, according to the RBA. The official cash rate is still at historic lows.

To put it bluntly, market sentiment is at an all-time high. So, let’s have a look at some of the current world records.

The real estate industry is a fast-paced beast that is always changing and evolving. What are the major trends expected in 2022? We have a feeling that a lot of things are about to change. Will real estate prices rise in the coming years? Will we see more investors joining the market? Will there be any options for first-time homebuyers? What about housing costs in large cities like London, New York, and Sydney? This article discusses five major themes that will impact the property market in 2022.

1. In 2022, the property market will have a bright future.

In 2022, the real estate market will be substantially different. People will be renting in greater numbers than ever before, and housing prices will be higher than they have ever been. This is especially true in locations like Dubai and Hong Kong. At this time last year, property prices in London and New York were at all-time highs, and house prices in Sydney were at all-time lows.

Will real estate prices rise?

The growth of other transport choices such as electric vehicles and various shuttles implies that many individuals won’t want to drive to the office. All of this means that individuals will seek housing closer to their workplaces, but this will not be enough to compensate for the significant increase in local costs and property prices.

House prices in certain big cities, such as Dubai and Hong Kong, are already at levels that buyers cannot afford, yet these places are expected to have the quickest growth. The average housing price in London, for example, is currently 30% higher than what it was in 2020. To push up property values in this area, you must purchase luxury residences at the top of the market.

Supply will be insufficient to meet demand.

Some argue that we are only at the start of a price bubble since house prices have increased faster than salaries. This has resulted in additional market-cooling measures in various nations, such as foreign buyer restrictions in Australia and Hong Kong, tougher mortgage lending standards, and so on.

This kind of policy will certainly assist to slow down the housing market in the near term, but they will not achieve a long-term balance. Instead, they have just created a vicious cycle in which prices continue to grow, and individuals take advantage of this by purchasing properties, which are then purchased by investors.

2. What will be the impact of rising property prices in big cities?

There’s no clear solution to this topic and it’s tough to foresee. However, as the population of Australia grows, housing prices in big cities such as Sydney and Melbourne are anticipated to continue to climb. However, with the introduction of foreign investor rules and tighter lending restrictions, house price growth may slow in the coming years. Property experts believe that state governments and regulators will place a greater emphasis on enabling more first-time buyers to access capital so that they can buy a home shortly. However, you’d be mistaken if you assume this means the end of Australia’s costly housing market. For the next several months, I’ve compiled a list of my top five property market trends to keep an eye on.

This is a contentious issue, and no one knows for sure. For some, this might be the end of multimillion-dollar houses. Others say that regardless of how many bathrooms, bedrooms, or entertainment amenities they have, they will remain an attractive investment. There’s little question that more sustainable ways for building sustainable homes are being developed, and we should expect to see them become more popular shortly.

While sustainable homes have gotten a lot of press recently, there’s also a lot of buzz around efficiency and design centers that may help cut the cost of building new homes. I anticipate seeing more of these sorts of regions spring up in both large western cities like Sydney and more cheap cities like Melbourne with lower population densities.

From banks to sellers, we may see a stronger emphasis on sustainability and efficient design throughout the whole property transaction process. It’s possible that submitting design data and reports with your home acquisition offer may become the standard. It may also explain why some of the most attractive houses are part of larger private equity investment portfolios rather than being purchased purely by individual purchasers.

3. Will real estate prices grow in the next years?

The housing market has risen rapidly in recent years, and many analysts believe that this trend will continue in the next years. Whether you’re buying a home to live in or an investment property, it’s important to evaluate how the property market is expected to evolve over the next few years. With prices growing so swiftly in recent years, it’s easy to be caught up in the market’s speculation, seeing all the potential rewards if you get in early and make your move. As a result, investors frequently lose out on opportunities to buy low and sell high. If you want to start investing invaluable property, now is probably not the greatest moment.

After years of seeing the price of a house climb on the news, it’s time to think about how property prices may alter in the next years, particularly in the critical London market.

Before we get into which locations are most likely to be influenced by the following several housing market trends, let’s look at why you should consider them before buying a home. This is also an opportunity to review the performance of your assets over the previous several years.

When it comes to the amount of money invested in the UK housing market, the purpose-built residential sector has gotten a lot of attention. These flats are usually of higher quality and are backed by a mortgage. While you won’t outperform if you purchase low and sell high, if you develop a portfolio around a combination of purpose-built houses and apartment complexes, you will.

These purpose-built flats have a variety of expenditures ranging from building charges to the furniture offered to the resident, depending on the type of property being acquired. Purpose-built apartments in the United Kingdom sometimes pay higher property tax rates than detached homes because they require larger hallways to accommodate occupants’ living quarters.

4. Will there be an increase in the number of investors in the market?

According to Nazarian, the beauty business will continue to attract a large number of investors. The good news is that as more money enters the market, there will be more competition and innovation to improve the products.

To begin with, we may expect a more connected, informed, and user-friendly purchasing experience. This involves additional education and understanding of the real estate market, as well as the ideal buyer, buyer persona, to expand our knowledge. And having the perfect home isn’t everything; you also need to know about the correct properties in the right places to earn the best return.

Second, demand for sustainable and thriving urban neighborhoods, as well as an understanding of the urban lifestyle, is at an all-time high. According to a 2021 poll, a third of all millennials would contemplate returning to the city if they could afford it, with Generation Z accounting for roughly a quarter of the total.

When it comes to selling city property, eager sellers must adopt a unique strategy to transform a prospective investment into a reality.

Selling an urban house generally entails a lot of renovations and modifications all over the place, as well as a big expenditure in remodeling work. These are costly to conduct out and might be time-consuming and pricey in the end.

Through what is effectively a real estate success scenario, selling an urban home might enhance pay rates in general (which can also lead to housing stock shortages and unrealistic prices for properties near major cities). It may also pique the curiosity of other investors who want to see our city and region thrive.

The “comeback” of small and medium-sized landlords is anticipated to be one of the largest themes in 2021. A 2021 analysis by German Search Industry indicated that more prominent local landlords saw their investment portfolio rise in 2021 than they had previously.

5. In 2022, will there be any possibilities for first-time buyers?

Many more homeowners are expected in 2022, but will there be enough properties for them to buy? According to the government, the UK will need to build 300,000 houses every year to meet demand. Will that, however, be sufficient? As the UK’s population continues to rise, there are some concerns that there may not be enough houses to go around. This may alter throughout the year as the country undergoes significant upheaval. Brexit rips the UK’s economic and political landscape apart, with many forecasting a period of uncertainty that might harm home sales and consumer confidence. Although the coronavirus epidemic was almost over by early 2021, there would be additional alterations. A big reduction in sales in the second half of the year might have a detrimental impact on the housing market as the UK looks for new houses.

One thing is certain: there will be chances for first-time homeowners, but they will not be many. Many purchasers would certainly feel constrained and unable to purchase a home as house prices and interest rates climb. As the property market reacts during the following year, key indicators such as house prices, home satisfaction, and economic growth will all be keenly monitored in 2022.

We’re here to assist you with any financial or refinancing needs you may have.

To learn more, contact Premium Finance Group Australia at (07) 4720 8888 or email us at finance@pfga.com.au

Disclaimer: The content of this article is general and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your situation and may not be relevant to circumstances. Before taking any action, consider your particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced, or republished without prior written consent.

Contact Us

Schedule your free 15-min call with an advisor

Let us know how we can help below.