Places where home prices aren’t slowing down in 2022
In 2021, home values in the United States increased by 22.1 %, and there are two major cities and one region in particular that are not yet ready to slow down. Where do you think it is?
I wish you all a happy new year! We’re looking at how the housing market did in 2021 and what we may expect over the next 12 months to start 2022.
According to the most current CoreLogic statistics, prices in Sydney (-0.3%), Melbourne (-0.1%), and Perth (-0.4%) slowed in December, indicating a two-speed housing situation across the country.
Brisbane (+2.9%), Adelaide (+2.6%), and regional Queensland (+2.4%), on the other hand, are expected to outperform the rest of the country in 2022, with CoreLogic stating that there is “no evidence of their growth slowing just yet.”
In fact, in December, each of these regions’ monthly growth rates achieved a new cyclical high.
According to CoreLogic Research Director Tim Lawless, “home affordability in Brisbane and Adelaide is less difficult, marketed supply levels remain extraordinarily low, and demographic trends continue to underpin house demand.”
In December, Hobart (+1 %), Canberra (0.9 %), and Darwin (0.6 %) were all in the center of the pack.
So, what’s driving other markets to slow down?
In 2021, the nation’s two largest cities, Sydney (+25.3 %) and Melbourne (+15.1 %), both saw excellent annual home value gains.
Both cities, however, have had their monthly readings fall to their lowest levels since October 2020, indicating that momentum has stalled dramatically.
According to Mr. Lawless, the slowing trend is partly due to a larger deposit required as a result of rising house costs and low-income growth, as well as negative interstate migration.
Mr. Lawless adds, “A jump in newly listed listings through December has (also) been a crucial role in taking some heat out of the property markets in Melbourne and Sydney.”
Meanwhile, the interruption to interstate movement caused by protracted closed state borders may be more to blame for the slower circumstances in the Perth property market.
Mr. Lawless adds, “This has had a negative influence on house demand.”
What may we expect in the year 2022?
In particular, housing stock in regional Australia is particularly low, with advertised stock levels completing the year 35.9% below the five-year average.
This is compared to a stock market that is 14.2 % lower than the five-year average for all capital cities.
Despite persistent international border limitations, “it’s probable that regional markets, particularly those with a lifestyle appeal, will continue to benefit from increased demand as remote working policies become more commonplace, and demand for vacation homes stays strong,” adds Mr. Lawless.
As interest rates begin to fall and affordability limits spread to regional markets, “these housing markets may enter a downturn phase in 2022 as interest rates begin to fall.”
In 2021, sellers had the upper hand in negotiations, but purchasers are projected to recoup some in 2022.
This is because the average time a property spends on the market is beginning to rise, whilst auction clearing rates are declining.
Does your 2022 purchase require financial assistance?
Increased entrance hurdles have resulted from the juxtaposition of higher house values with low-income growth.
Mr. Lawless says, “It is getting increasingly difficult to raise a deposit and finance transactional charges such as stamp duty.”
When it comes to securing your next property acquisition, whether it’s your dream house or adding to your investment portfolio, having a broker like us in your corner has never been more crucial.
Because of the present housing market, it’s also critical to know your borrowing capacity before you start looking for a home so you don’t overextend yourself.
So, if you’re interested in learning more about what you can borrow, contact us right now. We’d love to sit down with you and help you devise a strategy for achieving your property goals in 2022.
To learn more, contact Premium Finance Group Australia at (07) 4720 8888 or email us at email@example.com
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