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The real estate market in Australia has experienced a series of ups and downs over the past three years. For the large part of 2020, the series of lockdowns and border restrictions imposed by the government affected the real estate industry negatively as the nation battled the Covid 19 pandemic. But as the restrictions have been gradually lifted, many real property management experts believe that this will positively impact the industry. Also, most of them expect the following will happen in 2022 and benefit many industry players, such as the commercial electricians and many more.

The emergence of a property boom is possible.

Many of the surfacing predictions claim that the real estate industry will experience a property boom in 2022. Most of their assumptions are based on the fact that the country is experiencing a strong economic recovery. 

Based on the prediction by Louis Cristopher from SQM Research, property buyers will most likely outnumber the sellers because the Reserve Bank of Australia will probably keep the interest rates at low levels. Also, Christopher has forecast that the prices of Melbourne’s free-standing houses would most likely increase between 12 and 14 per cent. Finally, he has predicted that the costs of homes in Victoria’s regional areas could soar as buyers see the opportunity for lifestyle changes brought about by remote work. (1)

AMP Capital’s chief economist Shaun Oliver has predicted that the prices of properties in Victoria will continue to rise until 2023. He has also indicated that a cyclical downturn triggered by rising interest rates will start in the first part of 2023. These predictions are mainly based on the fact that most lenders are increasing the fixed mortgage interest rates for their 2- and 3-year deals right after implementing an increase for the 4- and 5-year loans. (2)

The housing market will not crash.

Contrary to the common belief of some real estate experts, the housing market will not crash in 2022. This is because the signs of an imminent crash are not present in the current conditions and most likely won’t for a long time. 

Aside from that, the housing market is also believed to be strong because the houses of the majority of homeowners currently have positive equity. The said prediction seems to coincide with an Attom Data Solutions report revealing that most homeowners who sold their houses in the first quarter of 2021 were able to earn about 44.9% of the properties’ original price. 

The inventory will most likely remain low.

Many real estate experts are confident with their predictions that the housing market will not crash in the coming year. One of the main reasons for this is the lack of inventory. Although there was a slight increase in the housing inventory in the past few months, the changes in the numbers are still low. Thus, it is correct to assume that the number of available homes for sale in the market will not be enough.  

More buyers will buy homes.

The number of buyers who will purchase their houses are also expected to increase. This prediction is based on the latest trend where more millennials and first-time buyers entered the market last year. Not only that, this trend is expected to continue until 2022. 

Furthermore, the millennial population is believed to stimulate the housing market in the coming years. As more members of this age group become capable of buying homes, the demand will automatically shoot up. 

The mortgage rates will go up.

Not a few real estate specialists are convinced that the mortgage rates will continue to spike up until 2022. Given that the number of buyers has increased and the inventory has remained low, housing prices could go up. Additionally, this trend could increase the borrowing costs and the monthly payments that homeowners are paying. 

 Stronger economic recovery is likely.

The latest Australian economy trends hint that the country would likely experience a more robust economic recovery in 2022. After a challenging 2020, it was seen that the country’s economy has been shaping up for recovery in 2021. The gradual easing of restrictions imposed by the government has already allowed economic actors to resume performing their roles. As a result, the post-Covid recovery efforts have gained momentum, and these conditions continue to surprise most of the country’s leading economists. 

Expect more government intervention.

Increased government intervention is also among the most important conditions that will likely prevail in the real estate industry in 2022. Many economists and experts agree that the Australian government will exert more efforts to make sure that the country’s economic recovery is fast-tracked and initiated well. The government will likely mobilise its vital agencies to ensure that the road to economic recovery is well-paved for more desirable outcomes.

Conclusion

Knowing what will most likely happen in the real estate industry in 2022 is essential as it could help those planning to buy homes in the future. They can use the predictions of real estate experts to decide whether it is best to buy houses in the current year or in 2022. Also, they can look into the figures provided on the forecasts and make use of these to their advantage.

Furthermore, delving into these expert predictions is very helpful for real estate agents and companies. This could serve as their guide in formulating the strategies that they can utilise to engage the real estate market and in launching their upcoming ventures. 

However, it is worth noting that all these predictions are not absolutely correct. Some of these may become irrelevant. Thus, it is best to consider these assumptions as mere guides. On the other hand, those planning to buy houses or properties should look for reliable real estate specialists to back them up. In this way, they will have the experts to lead them in their decision-making regardless of the prevailing trends in the real estate market. Finally, these professionals could assist them in getting the best deals that most real estate companies are offering.

 

References: 

1. https://wiserealestateadvice.com.au/property-market-outlook-2022/
2. https://wiserealestateadvice.com.au/property-market-outlook-2022/