Australia’s residential real estate market soared through 2021, with record-breaking sales and a meteoric rise in values, a new report shows.
Aussie’s Property Market Update for January 2022 notes that the estimated value of residential real estate reached record highs of $9.4 trillion in November 2021. That’s a $2.2 trillion increase from the previous year.
Nationally, an estimated 614,635 sales were recorded in the past 12 months, the highest in almost 18 years. In the 12 months to November, housing values increased by 22.2%, the greatest surge since 1989.
The value of Australian housing grew 1% in December and 22.1% over the course of 2021.
The report suggests that the steady growth through the year can be attributed to several factors: persistently low interest rates, higher savings from borrowers, a decline in advertised listings and fiscal and institutional support for households.
Another major change throughout 2021 was the extent to which working from home has empowered regional growth.
“As many businesses adopted remote and hybrid working models off the back of the COVID-19 pandemic, movements from busy cities to regional areas continued through 2021.”
According to CoreLogic, the coastal suburb of Yamba, NSW achieved the highest annual growth for units in suburbs across Australia, with a 56.6% uplift. Other high-achiever markets were found in Geelong (up 41.7%), Wide Bay (up 48.2%), and Tasmania (up 50.5%).
The report suggests that while the ongoing trend of low home loan rates is expected to continue throughout 2022, they could climb slightly above last year’s rates.
The good news is that, although fixed rates have been rising, variable rates are less likely to change significantly until the cash rate lifts later down the track. The Reserve Bank continues to maintain that a cash rate hike is unlikely before 2024.
How will the 2022 property market shape up to 2021?
Although the market remains healthy, the heavy activity seen in recent months is likely to slow following the selling boom of 2020 and 2021, the report suggests.
Buyer demand remains high but has eased off slightly towards the end of last year. Additionally, an influx of listed properties towards the end of 2021 provided prospective buyers with greater choice than they had in the first three quarters of the year.
“While the easing of restrictions will continue to support property markets around the country, any changes are likely to be minimal compared to the shift from the earlier months of 2021”, the report concluded.
