Written by APS Manager of Home Finance, Tony Calder.

predictions for the property market - 2022

Everyone is asking about predictions for the property market in 2022! House prices have grown 22 per cent in the past year, although growth has slowed in recent months. Hobart was the fastest-growing capital city in 2021, with prices growing a surprising 27.7 per cent

The big question that I’m hearing at the moment is; Will Australia’s housing boom come to an end in 2022?

Property market predictions

Experts are predicting that Australia’s booming property market is due for a slowdown this year, thanks to easing demand and an increase in homes on the market. 

We can expect property values to continue climbing in 2022. Some economists are predicting the RBA to raise the cash rate by 15 or more basis points in August 2022 followed by further rises later in the year.

This is going to come down to affordability constraints and rising mortgage rates which is likely to slow buyer demand and price growth. As the Reserve Bank (RBA) starts to increase interest rates as early as November, prices could very well drop as we move into 2023. 

How will the reopening of borders impact the property market?

Another question to address is whether the reopening of borders and return of ex-pats in 2022 will impact the demand for property in Australia. 

Should this occur, there is likely to be an increase in demand for property that would create a shortage of property stocks which inevitably may lead to further increases in property prices.

So what does this mean for first home buyers?

The number of first home buyer loans has dropped by 11 per cent over the past 12 months, according to ABS lending indicators. With government incentives finishing up in June 2021 and prices continuing to rise, many first home buyers were pushed out of the market.

Now, eager young buyers may choose to sit a little longer to purchase their first home, however, there still are some Government incentives available for first home buyers.

The First Home Loan Deposit Scheme occurs whereby part of an eligible first home buyer’s home loan from a participating lender is guaranteed by the Government under the NHFIC (National Housing Finance and Investment Corporation) up to a maximum of 15% of the value of the purchased property. Therefore a first home buyer will only need as little as a 5% deposit without the need to pay Lenders Mortgage Insurance. Unfortunately, there are only a few lenders that can facilitate this and spots in the scheme are limited or generally oversubscribed with waiting lists.

Most State Governments still provide Stamp Duty exemptions or concessions for first home buyers. For example, in Victoria, properties up to the value of $600,000 are exempt, while a concession is available for properties valued between 600,001 – $750,000.

State Government First Home Building Grants are also available and can range between $10,000 – $30,0000 depending on the state and where the property is located. Eligibility is subject to maximum property values, e.g. $750,000 in Victoria and New South Wales. 


Don’t get caught up in the unknown

Although having these insights is useful for planning, it’s important not to get too caught up in what is predicted to happen to the property market in 2022, and rather look at the best timing for your personal circumstances. As we learnt during the pandemic, despite anyone’s best predictions we can never be sure what is around the corner.

property predictions

Written by APS Manager of Home Finance, Tony Calder.

Tony has over 30 years of experience in lending and finance. His focus over the past 20 years has been in residential property lending, initially at Westpac and for the past 6 years at APS Benefits Group. Tony enjoys helping APS members and clients get the right loan to meet their specific needs and one of the advantages of working at APS is that he has access to a great range of lenders. APS is a residential property lender, so if someone finds it difficult to get a loan through the banks, Tony can on most occasions fund the loan through APS, which is a great outcome for members and clients. When Tony isn’t working, he enjoys travelling, dining out with family and friends and playing golf.   

To learn more about APS Home Loans and Mortgage Broking, or to chat to Tony, click here.