2021 will be remembered as a year when our property market defied the odds and boomed.
The challenge of grappling with a global pandemic shifted buyer priorities, placing a greater emphasis on the space in which we reside, this spurred purchases and brought forward decisions.
It has been an impetus for change, driving a social and lifestyle shift, sparking a renaissance in outer suburbia and accelerating the city drain into regional Australia.
Ultra-low home loan rates, government stimulus, rebounding economic conditions, returning expats and improved household savings became the perfect combination of factors for extraordinary price growth and activity in 2021.
Here are some details from the report...
- A record number of properties were sold across Australia.
- The number of property sales soared above the decade average by 18 per cent for the combined capitals and 42 per cent in regional Australia.
- It was the fastest annual rate of house price growth on record at 21.9%.
- National capital city house prices are closing in on a record $1 million.
- Melbourne and Canberra join Sydney to have a median house price above $1 million.
- Record number of scheduled auctions across Australia as sellers chased buyer competitiveness and opted to sell by auction.
- The more bedrooms a home has the greater the annual price growth as buyers pay a premium for space.
- The time to sell a house was the quickest it’s been since 2008 and 2014 for units.
- The difference between the asking and sold price plummets to a 18-year low, for properties sold by private treaty.
1. The top suburb in each state with the quickest sales:
- Goodwood, Hobart, TAS, 8 days
- Killarney Heights, Sydney, NSW, 10 days
- Diamond Valley, Sunshine Coast, QLD, 10 days
- Sassafras, Melbourne, VIC, 10 days
- Regency Park, Adelaide, SA, 11 days
- Holder, Canberra, ACT, 14 days
- Anula, Darwin, NT, 72 days
- Coolbinia, Perth, WA, 22 days
2. Most wanted house — 4 beds, 2 baths, 2 car spaces
2. Most wanted unit — 2 beds, 1 bath, 1 car space
4. Most popular keywords for 2021 — Pool/Swimming pool, View, Waterfront, Study, Courtyard, Balcony, New, Beach, Shed, Garage
The Domain End of Year Wrap shows that Australian capital city house prices peaked at $1 million, recording the fastest annual rate of growth on record at 21.9 per cent.
However, relief is expected for buyers in 2022 as the house price growth rate continues to cool.
Commenting on the changing property market conditions Dr. Nicola Powell, Domain Chief of Research and Economics said,
“The year is closing in a different position to the start, sellers are re-engaging with the market, increasing supply which in turn offer greater choices for buyers.
New listings are coming to market quicker than they are being sold.
While it remains a sellers’ market, slowly market dynamics are changing to provide more favourable conditions for buyers”.
2021’s heightened level of sales activity was not just a result of pent-up demand from lockdown but a reflection of changed property decisions compelling households to make a move.
It has been the year of change due to COVID-19 impacts and nothing shows this more than consumer behaviour when searching for property.
Keyword searches on Domain shine a new light on specific attributes and feature prospective home hunters are looking for.
Keyword searches for ‘study’, ‘garage’, ‘balcony’, ‘courtyard’ and ‘garden’ increased in 2021, and lifestyle additions and location became more of a focus, with a hike in searches for ‘pool’, ‘beach’ and ‘water’.
Working from home, as well as affordability constraints, have also seen a rise in regional living keyword searches with dramatic rises in ‘rural’, ‘acreage’, and ‘farm’.
Affordability continues the rise in prominence with searches for ‘duplex’, ‘dual’, and ‘unit’ of greater interest than previous years.
Dr. Nicola Powell adds,
“Analysing keyword searches helps us distinguish between changing trends or fleeting moments of desirability.
The pandemic has forced us all to use our homes differently as we spent more time than ever in them and perhaps forever made a mark on our purchasing decisions, property wish lists and architectural trends”.
Buyer demand was higher than the three-year average at the end of Spring 2021 across capital cities except for Hobart.
- Also read:The Pros and Cons of Property Investment
- Also read:How to add value to your property when selling but you’re on a budget
- Also read:The Boom and Bust of our Property Cycles: A Journey Through the Investor’s Mind
- Also read:Adelaide housing market update | November 2023
- Also read:Latest property price forecasts for 2023 revealed. What’s ahead in our housing markets in the next year or two?
While most cities are still recording higher levels of buyer demand, it began to slip over spring.
Dr. Nicola Powell comments,
“Spring began with a higher level of buyer demand than it has ended across most capital cities, to varying degrees.
The transition from Spring to Summer normally brings a dip in buyer demand with an average drop of 11 per cent across the combined capitals over the past three years.
However, the start to summer has been unusually strong by historical standards and is likely to bring with that more activity than has been seen over the past 3 summers.
However, affordability constraints, further pending moves from APRA and the prospects of interest rate hikes will weigh on buyer demand.”
As we move to 2022, Domain’s report suggests that buying opportunities are looking bright for 2022.
Appraisals are soaring above last year indicating that a number of homeowners are considering listing their properties for sale in the new year.
With new listings expected to remain strong which will continue to bring the total homes for sale into a ‘normal realm’.
Prices are not expected to rise at the same pace as in 2021 with tighter lending reducing buyers' leverage and wages growth not keeping pace with last year's price growth, bringing welcome news for home buyers.
Domain experts that Australians will continue to seek out coastal locations, with beachside popularity continuing to boom - house prices in Somers (Vic), Byron Bay (NSW), and Sunshine Beach (Qld) have increased by 69 per cent, 58 per cent and 48 per cent respectively over the past year.
Buyers will be enticed to hone in on coastal areas that are affordable and poised for future growth in 2022.
Dr. Nicola Powell adds,
“Investors will continue to be a growing market segment, unless APRA puts on the brakes.
It remains a landlords’ market across the most major cities and into regional Australia.
Investors have had the benefit of rising rents and equity growth, with prices set to continue to rise (albeit at a slower pace than 2021), investors will continue to chase it.”
Regions such as inner Melbourne and Sydney’s City and East which historically have a high level of overseas migration and student population will be susceptible to a tightening rental market once international borders fully reopen since most migrants tend to rent upon arrival.
1. Melbourne, VIC
2. Sydney, NSW
3. Mosman, NSW
4. South Yarra, VIC
5. Epping, NSW
6. Brisbane City, QLD
Dr. Nicola Powell shares,
“Population growth is likely to be a government focus in 2022 and beyond to sustain higher economic growth and build Australia’s skilled workforce, achieved by bolstering the migration intake.
Job ads are at the highest in 13 years, with severe shortages in certain areas as a result of closed international borders.
The return of overseas migrants, international students and particularly skilled highly-paid migrants, will add to demand for housing.”
For the full Domain End of Year Wrap, please click here.
ALSO READ: 8 Property trends we can expect in 2022