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2022 Housing Market in Review & Predictions for the year ahead

By Andrew Macdonald

2022 has been the year of inflation. From May to November, the Reserve Bank of Australia (RBA) delivered 275 basis points worth of rate hikes, the consequences of which have been deeply felt by the property market.

Now, with the year coming to a close, let’s unpack how far the housing market has come and where it’s going.

House prices appear to be stabilising with now showing a small rise

It is expected to be an interesting end-of-year for the housing market

After the weekly asking house prices in the Central Coast peaked in April, prices declined over several months, however during the last few months the prices have remained relatively stable and even posted a small rise of 0.6% so far this month, according to SQM Research, indicating a return of buyer confidence in housing’s medium-term outlook.

Asking property prices on the Central Coast:

Lower stock is containing price falls

Stock on the market has also increased compared to the beginning of the year, however levels are still below the levels seen in 2018 and 2019.

According to SQM Research, the total number of property listings across the Central Coast saw a brief dip around the end of 2021, with listings now increasing again.

The lower number of freshly advertised properties were probably helping to contain price falls to some extent. So far, we haven’t seen any evidence of panicked selling or forced sales.

Total property listings in the Central Coast:

Sales activity is still above 5-year average

On the demand side, the estimated number of home sales has held reasonably firm through the first two months of spring.

Based on modelled sales over the three months ending October, the number of capital city home sales were -16.6% lower than a year ago, but3.8% above the previous five-year average for this time of the year.

Tim Lawless, executive research director of CoreLogic’s Asia-Pacific research division noted:

“The number of home sales is well down from the highs of late last year, however the fact that sales activity is still above the five-year average over the past three months reflects a base level of demand remains for housing.”

Our housing sales activity for 2022 of Ray White Macdonald Partners showed an obvious slowdown in housing activities since the interest rates started to rise in May to curb surging inflation.

However, we’re seeing that since Spring demand started to increase with first-home buyers who are competing with investors for lower value properties as the borrowing capacity amongst buyers have shrunk.

Conversely, the demand for high end properties is less affected by the interest rates due to a lower reliance on funding and has also been stronger of late, with mid-range properties hit the hardest.

Housing Sales activity by Ray White Macdonald Partners Point Clare & East Gosford for 2022 to date:

Should you be in “wait-and-see” mode?

Aus Property Professionals founder, Lloyd Edge said it might not be wise to wait before getting into the market as bargains would be rare given how the rate hikes have affected property prices so far.

Lloyd said:

“We’re seeing the current property market showing resilience much morethan economists predicted as they had forecasted a 20% plunge”.

According to CoreLogic, Sydney home values are down only -10.1% since May. The Chief executive of the real estate website Domain has argued the property market is simply going from red hot to normal.

“We are looking at a return to more seasonal patterns and more average listing volumes and market activity over the course of the next 12 months.”

The property market is moving back towards average market conditions where there is a good balance between demand and supply.

When’s the best time to enter the market?

The best time to buy a property is when you can afford it.

While many experts are predicting no relief for buyers with more rate hikes still in store, buyers still have the upper hand in the current market when it comes to negotiations.

Buyers Agency Australia founder, Dragan Dimovski said despite the moderation in property prices, declines have been limited.

Dragan said:

“We aren’t expecting a huge decline in prices over the next 12 months. Extreme discounts on housing prices will be scarce.”

Are you looking to sell?

Have an obligation-free property appraisal with one of our agents and we will provide you with an estimate of the current market value of your home, including a summary of your property, recent sales of comparable properties and listing activity in your area and real-time market insights to help you make educated decisions.

Understanding how much your home is worth can help you make smarter financial decisions by knowing your net worth.

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