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What to Expect in our Property Markets in 2022 - featured image
By Brett Warren

What to Expect in our Property Markets in 2022

Hasn’t it been an incredible year for our property markets in 2021?

They have soared to heights nobody could have predicted just 12 months ago when there were so many grey clouds on the horizon.

2021 Property MarketBut what happens next and what does 2022 have in store for our property market?

Only time will tell, but understanding some of the factors that drive our property markets may give us some insight.

Factors like interest rates, APRA, buyer demand, and stock levels will all play a factor.

We are also heading into an election year where people tend not to make big decisions until there is a greater level of certainty.

Adding to that, there is also regularly an X-Factor that can be either positive or negative for the property.

So, let's unpack some of these factors and get an idea of what may be ahead.

What to Expect in our Property Markets in 2022

Interest Rates

Talk of rising interest rates in the short term has dominated news headlines in recent months.

While most commentators are taking a level-headed approach, there is no doubt the media has made up their minds.

But if you can cut through the noise to hear it straight to the horse’s mouth, you will note that there is no appetite from the RBA to raise interest rates in 2022.


It all comes down to Inflation at this stage and in its most recent statement – “The Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range.”

While that may come sooner than many thought, the forecast at this stage is for underlying inflation to reach 2.5% over 2023.

I would not be factoring in a cash rate rise in 2022 and cheap money will keep our property markets strong.


While the RBA is playing a wait-and-see game, the Australian Prudential Regulation Authority, aka APRA, may not be as patient.

We have already seen the prudential regulator call for banks to lift their buffer by another 0.5% when assessing borrowers.

While it has been described as more of a tap on the breaks than anything serious, it may be a sign of things to come.

Particularly as the investors' share of the market starts to increase.

It would not surprise me to see further regulations from APRA next year, most likely after an election, so as not to interfere.

How far they will go will likely depend on how our markets start the new year.

Buyer Demand

Buyer Demand has been at unprecedented highs in recent months.

Understandable, with no travel and other big-ticket items on the back burner, a new home or investment has been a focus for many.



Buyer DemandBut the numbers are suggesting we have hit the peak, and this will likely trend downward with many fulfilling their desire for property and other priorities taking over.

While there is not one Australian property market, the devil will be in the detail.

We have already started to see a fall in demand and auction clearance rates for Melbourne and Sydney, while Brisbane remains strong.

There are no doubt priorities will change as we head into 2022 and Buyer Demand will fall from record highs.

I would also suggest an Election will play a part in the early part of 2022 and many may delay their property goals until an outcome is clear.

Stock Levels

The other side of the equation is from demand supplies, in particular stock levels.

We really saw stock levels dry up and fall around 20% - 30% around the nation at various stages.


It makes sense, as many markets shut down completely with lockdowns, and many choose not to sell in an uncertain environment.

A combination of substantially lower stock levels and record buyer demand is a big reason why our property market hit record highs.

But with life getting back to some normality and lockdowns potentially over, stock levels will return to a more balanced level in 2022.

An X-Factor

X FactorUsually, an X-Factor is something that we do not see coming and while that still may be the case, it will likely be Coronavirus is yet to fully play out.

While high vaccination rates and promise of no more lockdowns may appear positive, only time will tell if this holds true.

For our property markets, this will also determine what will happen with international borders and I see this potentially playing a major role in 2022.

The reinstating of overseas migration and international students could reignite a slowing market, especially in Sydney and Melbourne.

While Brisbane will still benefit from the continual flood of in-state migration throughout 2022.


We’ve just experienced a once-in-a-generation property boom and I believe we will see a return to some normality to our property markets in 2022.

ApraWhile interest rates will likely remain on hold, it will be APRA that may be responsible for slowing the market should it continue at breakneck speed.

We are already seeing buyer demand fall as we close out 2021 and with more certainty into 2022, stock levels will also return to normal levels.

I feel most commentators' and economists’ predictions of 4% - 6% growth next year will likely play out.

But we also know how those predictions went a little more than 12 months ago.

The X Factor really is Coronavirus and what happens next.

Should international borders remain shut, it may all slow down quicker than expected.

However, if they open, it could fuel even more growth in our markets throughout 2022.

Of course, if you take a longer-term view, all of what happens next won’t be of any great concern.

ALSO READ: Here’s what property investors will be doing in 2022

About Brett Warren Brett Warren is National Director of Metropole Properties and uses his two decades of property investment experience to advise clients how to grow, protect and pass on their wealth through strategic property advice.
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