Record-breaking sales push NT unit market to new heights
The Northern Territory (NT) property market finished strong in 2021 with record sales in the unit market propelled by ro...
The impacts of COVID-19 are expected to continue to sway the property market in the year ahead, even as the country’s pandemic response alters the emerging trends.
LJ Hooker’s What’s in Store for 2022? white paper identifies four main influences set to exert pressure on property prices and sales over the coming 12 months.
But while there are changes ahead for the Australian property landscape, LJ Hooker’s head of research, Mathew Tiller, said there was no indication that demand will significantly wane.
“In 2022, we expect to see continued property price rises in both metropolitan and regional areas, but it won’t be at the same pace recorded over the past 12 to 18 months. The tightening of mortgage lending criteria and the speculation of interest rate rises will slow the rate of growth,” Mr Tiller said.
According to him, a boost in supply will keep movement in the market, giving hope to the many prospective buyers who have struggled in the current ecosystem.
“With restrictions now easing in every state, a larger volume of listings is expected over the course of 2022 as homeowners start to feel more comfortable with the notion of selling. This is positive news for house-hunters who have struggled with high competition and lack of choice during the pandemic.”
As supply picks up and price growth slows, Mr Tiller believes these are the trends that will come to the fore:
1. The shift to the coast will not abate
In the nearly two years since the onset of COVID-19, regional property markets across the country have seen significant increases in demand, with regional markets outperforming capital city markets in every state and territory except for South Australia.
“The regional trend has been driven by both intra and interstate migration as city dwellers reassess their lives following lengthy lockdowns,” Mr Tiller noted.
“Seaside living will remain popular with the race on to find affordable alternatives while not compromising on lifestyle.
“Finding the next Byron Bay, which experienced a 47 per cent increase in prices over the last 12 months, and whether it is possible to replicate the town’s phenomenal increase in value, is a trend we are likely to see explored in 2022.”
2. International arrivals will fuel unit demand
LJ Hooker’s research indicates that rental markets will feel the biggest impact of Australia’s borders reopening. The presence of international tourists, students, and workers will soon start to be felt in the capital cities, with investment prospects in the unit market looking up to cater to the demand.
“As people continue to return to a more normal way of life, confidence will increase in market sectors that have endured the brunt of border closures, particularly inner-city apartments,” Mr Tiller said.
He noted that across the country, easing restrictions were already having a positive impact on rental vacancy rates.
“This trend is expected to continue into 2022 as our cities start to awaken. Investors are likely to be the biggest beneficiary from the return of international visitors to our shores,” he said.
3. Luxe listings will continue to secure sky-high prices
High net worth foreign buyers are also expected to make their return to Australia in 2022, as well as former expats once again looking to live on Australian shores. Between the two demographics, demand for prestige property is predicted to remain strong.
“Premium properties are expected to continue fetching eye-watering prices as demand for high-quality, luxury living and the demand for more space continues in 2022,” he said.
4. Outpriced buyers will build instead
Even with supply increasing, the overwhelming demand could see many opt out of competition and choose to build their home instead of buy.
“House and land packages are growing in popularity, and they have allowed those unable to buy into more established suburbs an ability to get a foothold onto the property ladder,” Mr Tiller noted.
“While prices are increasing, house and land packages can be secured on a small deposit adding to their appeal for those looking to upgrade but happy to wait for building to be completed.”
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.