A huge question mark hangs over the second half of 2022 as inflation pressures, rate rises and the impact of international events start to bite here in Australia.
Treasurer Jim Chalmers warned that inflation will be ‘significantly higher’ than expected this year. While Reserve Bank governor Philip Lowe predicted that inflation would hit a 32-year high of 7 per cent ‘sooner rather than later’.
So it was no surprise that nervous vendors withdrew from auctions in record numbers before the last weekend of June, as interest from prospective buyers waned.
June has seen a weakening of the housing market, particularly in Sydney and Melbourne, which are more sensitive to interest rate fluctuations.
But even in Adelaide, one of the more buoyant markets of late, the pace of growth is slowing. Homeowners wanting to sell now fear they’ve ‘missed the boat’.
While prospective buyers play the waiting game as housing affordability and rising interest rates become the primary concern.
Confidence in the construction sector also continues to decline due to the wave of construction firm collapses. New figures show that the cost of building and renovating has increased significantly over the last two months due to supply chain and labour shortages.
Adding salt to the wound, commercial property owners finally regathering post covid have been hit with faltering rent collections in May.
Rising costs and interest rate increases are impacting tenants’ ability to pay. All in all, a disappointing end to the financial year.
- “Downturns are always shorter and less severe than the upswings”. That’s the advice from Dr Nicola Powell, NSW Domain chief of research and economics and author of the Domain Spotlight Report. According to Powell, while we’ve seen house prices rising in Sydney by 40 per cent in the last two years, we’ll now see them pared down by only 10 per cent in the market ‘correction’.
- Despite the market slow down, it appears that the most in-demand properties in Greater Sydney are in the waterfront suburbs. Birchgrove, Canada Bay, Lavender Bay and Clontarf were among the suburbs with the highest views per listing in the last three months.
- Sydney’s Sutherland Shire, Central Coast, North Sydney, and Hornsby regions had the highest proportion of properties sold in the last year. Areas such as Sydney’s Inner West, Baulkham Hills and South-West had the lowest proportion of properties sold.
- The NSW Government has taken the first step in reforming stamp duty. Announcing that eligible first home buyers will have the choice between paying annual property tax instead of stamp duty. The aim is to lower the up-front costs of home purchases and boost the rate of home ownership in NSW. Legislation is expected to be introduced in the second half of 2022.
- In part responsible for the great property boom of the last year, Melbourne is now leading the way in declining property values across the country. Data from CoreLogic showed that the property market has fallen across four of the past six months. The median price of a home now stands at $806,196.
- Melbourne has been named Australia’s most liveable city and number ten in the world according to the Economist Intelligence Unit Liveability Index 2022.
- Melbourne’s rental market continued to recover over the last month as the city’s vacancy rates declined for the sixth straight month. Vacant listing rates also fell 8.5 per cent over the month to 8,200, a significant recovery post-lockdowns. Sought-after locations for tenants include Yarra Ranges, Cardinia, Casey, Nillumbik and Knox.
- Melbourne’s Latrobe, Geelong, Mornington Peninsula and northwest saw the highest number of properties sold over the last twelve months. Other areas such as the outer east and north east of Melbourne, as well as Shepparton, saw lower numbers of overall properties selling.
- Brisbane house-hunters looking for a bargain should look to the following suburbs for discounts on house sale prices. Domain reports that Sherwood, Brisbane Inner North, Nundah and Nathan can be snapped up for 8 to 10 per cent less than the asking prices.
- According to Finder’s Property Investment Index, these five Brisbane suburbs, with median prices under $1 million, are on the hot list for price bumps in the coming year. The list includes Fitzgibbon, Yamanto, Tingalpa, Lutwyche and McDowall.
- The Queensland Government announced the Housing Investment Fund as part of the June Budget. The initiative would deliver up to 1200 new social and affordable homes in a partnership with the Brisbane Housing Company and Queensland Investment Corporation.
- With people now free to move across the Western Australian border, there’s been renewed interest in the state’s capital. Data from realestate.com.au shows that monthly searches were up by 25 per cent. In-demand locations include Amberton Beach, Aveley and the Swan Valley.
- Despite the doom and gloom across the rest of the country, the Perth market remained strong, with median sale prices increasing in the last month. REIWA president Damian Collins said market conditions across Perth remained solid, with the overall median selling time only 15 days. Areas with homes selling within seven days of listing include Heathridge, Inglewood, Kingsley, Woodvale and Bedford.
- 2022 is emerging as the year of the apartment in the ACT. With rising costs of living and interest rates, investors and home buyers believe that investing in an apartment is preferential to buying a house. Apartments in town centre locations like Woden, Phillip and Campbell are on the top of the list.
- Canberra’s top five suburbs to purchase property include Charnwood, Dickson, Gungahlin, Isabella Plains and Ngunnawal.
- Adelaide continues to garner interest from interstate buyers who want to downsize or buy into a ‘value for money’ market. According to Hotspotting’s Price Predictor Index report, 123 suburbs in Adelaide are now considered ‘rising markets’. Rising market suburbs with medians under $500,000 include Blakeview, Elizabeth, Evanston Park, North Adelaide and Plympton.
- CoreLogic data released at the end of June shows Adelaide’s Home value Index increased by 1.8 per cent in May to a median price of $628,744. This equated to a 5.7 per cent increase in the past quarter and an annual change of 26.1 per cent.
- Renters and buyers are flocking to the top end due to a new surge in relocations from southern cities. Housing approvals are now at their highest rate in five years. Darwin, Palmerston, Litchfield, Humpty Doo and Howard Springs are growing in popularity.
- Zuccoli has become Darwin’s neighbourhood of choice with modern family homes and prices of less than half a million dollars.
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