Welcome to the Treak Real Estate Property Update: our regular round-up of news from the Sydney and national property markets, as well as what’s happening right here at Treak!
Merry Christmas to all!
With Santa wrapping up the last of his Christmas presents, it’s almost time for Treak to wrap for the year as well. Our last day will be Wednesday the 22nd of December, with the team returning on the 10th of January after a well-earned rest and an inadvisable amount of holiday food.
That makes this newsletter the perfect opportunity to thank every one of our clients for contributing in their own way to what was an amazing first full year at Treak Real Estate. It’s been a fun and fulfilling ride so far, and our wonderful clients played a huge part in that, so we thank you from the bottom of our hearts.
We already have one eye on next year, with a focus on growing the business through our property management and buying services. We have a feeling that 2022 will be even better than 2021!
That said, we’re not done with this year just yet. There are still a couple of weeks to go before the Christmas break, so if you’re considering buying yourself a special holiday gift – a new property – there’s still time to make a pre-Christmas purchase. You just have to act fast!
5 key property trends for 2022
Given the unpredictability of the last two years, it might seem foolish to guess what might happen in the next 12 months. But with New South Wales having opened up to the world, a sense of normality is slowly returning, and a sense of market confidence is returning with it.
In 2021 Australian housing prices grew at the third-fastest rate in our history. But what’s in store for Sydney property in 2022? Here are some of the trends I see playing out over the next 12 months.
1. Fewer first home buyers
Right now we’re seeing fewer new entrants into the property market, with the number of new loan commitments by first home buyers down by more than a quarter when compared to the same time last year. While some of this is due to the recent tightening of lending criteria by APRA, which reduced buyer borrowing power by around 5%, in truth this is a symptom of the larger issue for new entrants: property prices are simply out of reach. And the first home buyer decrease is a trend that looks set to continue into 2022.
APRA have hinted they’ll consider introducing stricter measures if property markets continue to grow too fast for their liking, and banks may look to tighten their processes of their own accord in order to minimise risk. But as we saw with the lending criteria changes, some measures aimed at making the market more affordable in the long-term can still negatively affect first time buyers in the short-term.
Those first home buyers looking to get into the market should focus on purchasing a stepping-stone property rather than a forever home. By choosing an apartment or unit over a fully detached house you can get your foot in the property door, and eventually work your way into a forever home.
2. Family-friendly apartments in vogue
House prices have increased at a far faster rate than Strata property prices in 2021 – in fact, the price difference between units and houses is now at the highest level on record – so just as first home buyers don’t face as much of an uphill battle in finding an apartment versus a house, neither do families.
Houses are now simply unaffordable for many families, who are increasingly looking at spacious apartments to call home. Owner-occupiers and investors are beginning to recognise that family-friendly apartments in highly prized neighbourhoods are likely to offer incredible capital growth in 2022.
3. More properties, less FOMO
As we leave the COVID lockdowns behind and begin to get back to normality, Sydney vendors are feeling increasingly confident about putting their properties on the market. After a long period of undersupply that served to turbo-charge property prices, in 2022 we’ll finally get back to some form of supply and demand equilibrium, particularly as vendors now attempt to capitalise on valuations that are now markedly higher.
More properties will mean less competition between buyers, which will enable them to be far more discerning. No more jumping into the wrong property without doing due diligence, for fear of missing out.
4. Property values will rise… slower
An increase in supply doesn’t mean that prices will fall in 2022. They’ll continue to rise, though the relative lack of buyer FOMO will mean that growth will be at a slower rate than the record-setting figures of 2021. Housing finance approvals remain at very high levels, indicating that there will be a strong, ongoing demand from investors and owner-occupiers next year.
And where the growth of 2021 was primarily driven by owner-occupiers and first home buyers, in 2022 it will more likely be investors who are pushing the market forward, as they are attracted by the prospect of capital gains.
5. A hunt for properties with ‘pandemic appeal’
We all lived through it: endless days and weeks stuck within the four walls of our home, but for the quick bit of exercise or trip to the shops. With lingering uncertainty about when this pandemic will end, particularly given the recent spread of the Omicron variant, there will continue to be a focus on properties with ‘pandemic appeal’.
‘Could I hide out here for months at a time?’ many buyers will ask themselves. These buyers will bring an increased focus on liveability, and will often be prepared to pay a little more, particularly if it means:
They get a backyard, a pool, a luxurious home office or an entertainment area
They can trade an elevator for street access
They get a property that is near a park or open space.
All I want for Christmas is…
If that sentence ends with ‘a new property’, now’s the time to act! With the Christmas break fast approaching, buying a property in 2021 is becoming a now or never proposition.
If you choose ‘now’, we’re here to help. At Treak we make purchasing a simple and fun process – just give us a call or reply to this email to get started!
No matter whether we hear from you before or after the break, we want to wish you a Merry Christmas and a very happy New Year.
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