By Alex Tan - Finance and Coffee, Jan 2022 It’s hard to know exactly what to expect from the housing market amid constantly shifting circumstances. However, let’s have a look at the latest CoreLogic report on the housing values over the last year to identify a few trends that are giving shape to the markets to predict what we may be up against in 2022. Despite many homeowners’ hopes, the total value of housing grew at the slowest pace of 1% last month, a slowdown from 2.8% in March 2021. The weakening demand for housing might be the direct result of :
Hobart and Brisbane housing values have risen the most in 2021, with an annual increase of 28.2% and 27.4% respectively.Brisbane, Adelaide and regional Queensland led the charge, while Sydney and Melbourne property prices lagged. Melbourne property values actually dropped 0.1% last month. As for Sydney, house prices rose by just 0.3%, the smallest gain for 14 months. As you can see, the market has taken off over the past year but softened since the frenzied heyday of 2020.
Expensive property prices are pushing rental yields to historic low as the rental market struggles to keep up. Despite climbing at their fastest rate in more than a decade, the dwelling rental growth is still at a single digit (9.4%) compared to the 22.1% jump in national housing value last year. Peeking into the crystal ball Given no deviation from the current landscape, CoreLogic expects housing values to continue to rise in the short term. In the long term, the expectation is that a period of negligible house price growth is most likely as household finances come under pressure. Let’s be honest, the kind of price rises that we’ve seen are unsustainable. There is no doubt that affordability was becoming more stretched on the back of property values outstripping earnings. Despite all our best predictions, the market would likely depend on many factors such as the path of the pandemic, overseas migration, the trends in the labour market, demographic patterns and supply levels. If you think the time is right for you to buy, give me a call on 0411 849 804.
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