Is 2022 a good year to buy a home? What about investing in one? A month before 2022, many experts have weighed in on what Australia’s property market might look like this year. Sadly, it might not be a great year for first home buyers as prices are expected to increase again due to rising demand and other factors. But that’s not the end of the story – read on to learn more about Australia’s property market forecasts in 2022.
House prices expected to rise
As mentioned, Australian home prices are predicted to rise again before decreasing in 2023, according to several banks.
Property values are expected to rise by 4.9 percent in 2022 and fall by 4% in 2023, according to NAB. Meanwhile, ANZ sees housing prices to rise by 6% next year before falling by 4% in 2023. The figures given by the Commonwealth Bank are also pretty close. According to their forecast, house prices will rise by 7% this year.
Increase in demand will drive house prices
A property boom happened in 2021 because there was a lack of available properties in the market. This year, there will be new listings but property market experts still see that there will be a rising demand that can drive house prices even further.
This heightened demand will be enjoyed by the well-connected regional market and lifestyle locations like Queensland as city-dwellers seek to leave the states hit by the pandemic and the lockdowns.
The decline of first home buyers
2021 started with a record-high number of first home buyer loans, but that started to decline as the year progressed. This trend is expected to continue in 2022 because house prices have risen to high heights in 2021 and is forecasted to increase further in 2022.
According to InvestorKit’s head of research Arjun Paliwal, the main hurdle for home buyers, specifically first home buyers, will be saving up for a home deposit. If you’re not an investor and just trying to save up for a deposit, the increasing housing prices can really get out of control, said RateCity’s Director of Research Sally Tindall, backing up Paliwal’s forecast.
Tighter loan regulations
The Australian Prudential Regulation Authority (APRA) raised the interest rate serviceability buffer for mortgages in October 2021. APRA is expected to interfere again next year, possibly by imposing a restriction on loan-to-income ratios, which are already at hazardous levels, according to some analysts. They could also impose some limits on borrowers with loan-to-value-ratios (LVR) of 80 to 90%.
No matter what happens, Fastgrow Finance is here to help
At Fastgrow Finance, we understand the property and finance market very well, and we always adapt to whatever changes that may happen – may it be tighter regulations, increasing home prices and more.
We also take a deep dive into our client's goals and situation to provide the best solutions that suit their budget. This makes us one of the trusted mortgage brokers and consultants in Australia.
If you need help with your home loan or any type of loan, feel free to contact us. Our experienced brokers will work with you to find a lender that’s perfect for you.
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