In 2022, we are living in a very different world than we were just two years ago. You don’t have to go far before you run into someone struggling with the cost of living, the housing shortage, or the other flow-on effects of the pandemic.
Whether in your local coffee shop, on the news or in political propaganda, you’ve likely heard that the property market is experiencing some significant shifts and changes. Being informed about the condition of the housing market is one of the most important steps before buying or selling your home. So, what does the current state of the property market mean for you? What is truth and what is exaggerated when it comes to predictions for real estate in 2022? Read on to discover more.
What does the data have to say...
According to the CoreLogic Hedonic Home Value Index, the property market in Brisbane has recorded strong growth throughout the first half of 2022, up to 1.7% dwelling price growth, while the market in Sydney and Melbourne has slowed right down. The growth in Brisbane for houses is higher than units; however, the gap is gradually closing to even the score.
Even during the floods in February and March, contracts were entered into and settled, despite city-wide uncertainty. The middle and bottom ends of the market have experienced the most consistent growth rate, with the top end beginning to lose some momentum in April. Despite this, all three sections of the market have experienced peak growth rates across three months of observation at the beginning of 2022, which is very reassuring.
The lowdown on interest rates
During the pandemic, interest rates hit a record low, encouraging many people to buy investment properties or make that big move they’ve always dreamt about. In 2021, 16,400 more people moved interstate than in 2020, putting the migration number well over 100,000 people. Queensland experienced the highest rate of net interstate migration over the March 2021 quarter, specifically Brisbane, which gained the most people beating every other capital city. In fact, Melbourne and Sydney recorded a population loss of close to 10,000 people.
According to leading property strategist Michael Yardney, the increased demand for Brisbane housing has been underpinned by increasing consumer demand, low-interest rates, and internal migration with comparable affordability in comparison to Melbourne and Sydney. A report from Westpac has predicted that prices in Brisbane are tipped to surge by 20% between 2022 and 2023, becoming one of the best-performing property markets over five years.
Queensland homeowners need to brace for higher interest rates, with the Reserve Bank raising interest rates by 50 basis points. This happened sooner than many economists predicted; however, the Reserve Bank has stated that it will only be guided by data, with inflation expected to climb slightly before declining as we reach the end of the year. Nevertheless, homeowners can be cautiously optimistic about this, as there is supporting evidence that the RBA doesn’t plan to raise the interest rates beyond a sustainable point for the average family.
Despite what you may have heard in the media, political propaganda and your neighbour’s barista’s sister’s experience, the interest rates are expected to remain predictable and sustainable. Not all homeowners will feel the pinch, and the rate of employment is at an all-time high in Brisbane, hinting upward pressure on wage growth is on the horizon.
What does the future of the Brisbane market look like?
While Brisbane boasted the strongest property market in 2021, many people are assuming this won’t last for the sunshine city. On the contrary, while many parts of the country are experiencing record low growth, the Brisbane property market is showing no signs of slowing down as we reach the second half of 2022. Historically, the Brisbane property market has bounced back quickly, even during extreme weather events. Moving forward, the market is expected to remain strong, with some areas doing better than others. This is known as a ‘segmented’ market, which is much more common and sustainable than the record-high growth we’ve seen thus far. Some areas will continue to boom, others will slow down, and few will fall, all based on the supply and demand of the area.
The cost of housing has risen by a further 1.7% in April this year, resulting in some of the fastest quarterly growth rates across all capital cities. Brisbane and its surroundings continue to have a high level of demand with low supply, which will continue to light a fire under the market for buyers and sellers.
With plenty of growth still to come, Brisbane remains affordable and equitable for homeowners, both established and brand new to the market. Therefore, it is more important than ever to work with a professional and experienced agent who knows the ‘hot spots’ from the ‘not spots’ and is committed to helping you get the most from your sale. With the advantage of local knowledge on your side, you will be fully informed to make a property decision that will benefit you for years to come.
If you’re looking for a team who cares and has the experience to back it up, get in touch with Grant and Christina Penrose today. We have our finger on the pulse of Brisbane real estate so you can have confidence in your next property move. Click here to contact us, and you’ll be one step closer to making your Brisbane property dreams come to life.