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The property markets are up and running for 2022.
In fact the 2022 auction market kicked off early with 448 capital city homes being taken to auction last week.
However, these sales are not a good indication of overall market sentiment as they generally occurred in seaside and holiday locations.
The number of homes taken to auction will continue to rise overcoming weeks with over 1150 auctions expected to be held next week compared to the 884 over the same week last year.
Our experience at Metropole and speaking with agents across Australia reveals continuing pent-up demand from both homebuyers and property investors.
Remember home buyers are sellers, and sellers are buyers and therefore for all those properties sold at the end of last year there are now vendors who have to find new accommodation.
Not surprisingly there is little property data for the week ending January 24th with the housing market moving through the usual seasonal slowdown in transaction activity.
However, Corelogic’s Property Market Indicator report revealed a 0.8% lift in the value of dwellings across the five largest capital cities over the month of January 2022 so far, including a 0.2% rise across Melbourne dwelling values, which had fallen through December.
Value changes across the capital cities continued to be led by Brisbane and Adelaide
Strong value growth across Brisbane, as well as a more positive outlook for Queensland dwelling values more broadly for 2022, may be supporting an uplift in vendor activity with new listings advertised in Brisbane over the past four weeks being 20.6% higher than in the equivalent period of 2021.
As I said, it’s still too early in the year with too little data to really gauge how our markets are performing, however in the coming weeks when auctions return, we’ll receive a timely read of housing demand as we emerge from the holiday period.
Here’s what’s happening to property prices so far this year…
- Sydney property prices rose 0.2% over the last week, 0.7% for the month of January to date, and up 25.9% over the last 12 months.
- Melbourne house prices remained flat over the last week, and are up 0.2% in the month of January so far, and up 15.1% over the last 12 months.
- Brisbane house prices increased 0.5% over the last week, up 1.9% for the month to date, and 28.7% over the last year.
To help keep you up-to-date with all that’s happening in property, here is my updated weekly analysis of data and charts as of January 24th, 2022 provided by Corelogic, and realestate.com.au.
The number of properties for sale in Australia is still in short supply
Despite the many properties that came onto the market at the end of last year, the supply of properties for sale just can’t keep up with demand.
At the end of last year for every new property coming onto the market for sale in most parts of Australia 1.4 properties were sold.
It’s likely 2022 will see buyers out in force – owner-occupiers, investors, and first home buyers – at a time when available supply struggling to keep up.
And remember that buyers are sellers and sellers are buyers so in most cases each time a property is sold another buyer is out in the market looking for a new home.
The table below shows how the stock of advertised properties is well below year-ago levels across all capital cities.
At the same time “time on market” continues to decline.
These are signs that property values will continue to rise moving forward.
Median property prices
Vendor metrics confirm that despite the increased number of properties being listed for sale we’re in a seller’s market with the number of days to sell the property very low (a sign of the tight supply situation), and vendor discounting (it’s easier for them to sell) at very low levels.
In general, houses are selling better than apartments, but the shortage of good properties on the market is seeing properties selling quickly with minimal discounting.
January 2022 Market Indicator Report
Australia’s property market delivered a solid finish to what was an extremely strong year according to Proptrack’s January 2022 Housing Market Indicators Report
December saw a surge in market activity as many vendors, who had delayed listing during lockdowns, raced to sell by year end. Buyers responded, with more properties selling in the second last week of December than in any other week in 2021.
While buyer demand remains strong, there are signs the market is moderating and the number of searches and enquiries to buy have been trending down since October.
Despite this, properties that were listed for sale in December continued to sell at close to record speeds.
Following the seasonal lull brought on by the holidays, buyer and seller activity is predicted to pick up in the second half of January. Price growth, which was in excess of 20% over the past 12 months, is likely to have peaked, with more modest growth forecast over 2022.
Across every state and territory, the number of searches on realestate.com.au to buy property fell over the fourth quarter of 2021.
Our Rental Markets
Nationally, dwelling rents increased by 9.4% over the 2021 calendar year.
Unit rents were up 7.5% over the year compared to the 10.1% lift recorded in house rents.
Rental growth trends across the unit sector have generally been milder than houses, with unit rentals being disproportionately affected by stalled overseas migration as well as domestic rental preferences shifting away from higher density options through the pandemic.
However, these trends are starting to change as rental affordability diverts demand back towards the unit sector.
In Melbourne, where unit rents fell by -8.5% between March 2020 and May 2021, higher density rental markets are now recording a faster rate of growth than houses, with Melbourne unit rents recording a 1.6% quarterly increase compared to the 0.9% rise seen in house rents.
The tightest capital city rental market over the year has been Darwin, where dwelling rents rose 15.2%.
Conditions have eased a little over the second half of the year, with annual rental growth moving through a peak of 22.3% over the 12 months ending August.
Although rents have surged across the northern most capital, Darwin’s rental index remains 7.6% below its 2014 peak; a legacy of the 26.3% decline in rents recorded between March 2014 and December 2019.
With national housing values recording an annual rise of 22.1% compared with a 9.4% rise in rents, rental yields have decreased as a natural consequence.
Gross rental yields fell to a new record low across Australia, reaching 3.2% in December.
The lowest yields, by some margin, remain in Sydney (2.4%) and Melbourne (2.7%), however, with the exception of Perth and Darwin, every capital city is recording record low yields.
Weekend’s auction clearance rates
The auction market started early in 2022 with 144 homes taken to auction across Melbourne this week, making it the busiest auction market in terms of volume.
Auction clearance rates were generally higher across the smaller capitals continuing the strong trend observed throughout late last year.
Source of graphs and data: CoreLogic, REA
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