2021 was the year that properties became more important than ever. Who would have thought that more than a year into the COVID-19 pandemic we would all be spending months on end locked up in our homes?
But while the world around us appeared to stand still for a large part of the year, or at least slow down dramatically with businesses shut, work from home orders in place and many activities or events cancelled, the exact opposite took place on the property market, especially here in Sydney.
The demand for property was the strongest we’ve seen in a long time and as a result the market was moving at astronomical rates with prices skyrocketing and properties selling just days after launching to market. COVID restrictions didn’t dampen the property market as some may have expected, but instead forced Australians to put more focus on our homes and the lifestyle it may provide. Many buyers went out seeking more space, more bedrooms, home offices, bigger shared living spaces and bigger backyards. Others realized their commute to work was no longer an issue and wanted a tree-change to something more rural. Whatever the reason, many of us were looking to make a move with Domain recording a record number of properties sold across Australia in 2021.
We also had to adapt to new ways of buying and selling properties throughout COVID restrictions, like conducting one-on-one private inspections, taking buyers through properties virtually, holding zoom auctions and electronic contract signing.
If we had to describe 2021 in a word, it would have to be unpredictable. But while we may not have known what was coming this year, we can certainly take note of some trends that we can expect to see in 2022.
Here are McConnell Bourn’s top three property market predictions for 2022:
The Market Will Become More Balanced
We’ve all heard about the incredible growth that the market has seen throughout 2021, with Domain recording that we saw the fastest annual rate of house price growth on record at 21.9%. While this is great news for property owners, growth at this rate is certainly not sustainable.
We believe that 2022 will bring a more balanced market with more modest growth at around 6%-8%. This is more in line with historical long-term growth for the property market and overtime will still see an incredible rate of return for your investment.
We Will See More International Buyers As Those Overseas Look To Move To Sydney
The international borders are finally beginning to open again, which means that we could to start to see an influx of international buyers. These could be people that are expats looking to move back to Australia after not being able to return for two years, those moving to be closer to family or those who are simply looking to make a change after dealing with a long period of COVID restrictions on travel.
The feeling is that Australia, and specifically Sydney, is a very desirable place to live at the moment. This is good news for those thinking of selling as it could mean more buyers who are highly motivated to compete for your property.
Interest Rates To Rise Moderately
Interest rates have been kept on hold for a long period of time now, so it isn’t that much of a shock to expect to see a rise in interest rates in 2022. APRA has also made it’s first move to tighten borrowing conditions to ensure that borrowers can afford a home loan should interest rates rise, hinting that a rate hike is expected. While we don’t believe that rates will rise dramatically, it could still have an impact on the market and the amount money that people area able to borrow, restricting their buying potential. This could take some of the heat out of the market that we have seen in 2021 and slow the rate of price growth, which already mentioned is likely to balance out in 2022.
Buyers Still Drawn To Ku-Ring-Gai On The Upper North Shore
Despite any changes that may be coming to the market in the next year, it doesn’t change the fact that the Upper North Shore and Ku-Ring-Gai area is a highly sought-after place to live. This means that the Upper North Shore market is still likely to see moderate growth during a balanced market rather than a dip in growth. Buyers are attracted to the area for many reasons, such as:
- Ease of transportation: The Upper North Shore provides an easy commute into Sydney CBD with convenient railway systems, bus routes and access to major roadways and links
- Education Facilities: Some of Sydney’s best school’s are located in Ku-Ring-Gai, including both Private and Public schools. This makes the area an attractive place to live for families.
- Environment and Community: There’s no doubting that the Upper North Shore is a beautiful location, right on the cusp of nature and filled with leafy trees and greenery. The friendly community that feels quite safe and secure, which is again very attractive to families.
Of course in a COVID world, it’s sometimes hard to predict what is ahead. But no matter what 2022 brings, the team at McConnell Bourn will always be here to help you with your property needs. Thinking of making a move next year? We’d be delighted to help. Please get in touch.