NaN% completed
Loading page...
Austrailan property market 2022 predictions

Have property prices peaked in Australia?

January 19, 2022 10:00 am by Upside

Last year we saw Australian house prices reach record heights, with the property market delivering a strong finish to a strong year. December brought a surge in market activity as vendors raced to sell by year end. The influx of new listings resulted in an eager response from buyers, with more properties selling in the second last week of December than any other week in 2021.

While buyer demand still remains strong and properties that were listed in December continue to sell at close to record speeds, signs that the Australian property market will moderate in 2022 have begun to show.

The property market has begun to shake off the seasonal holiday lull, with buyer and seller activity ramping up for the year.

While Australian house values grew 22.1% over the last 12 months (a growth rate not seen since the 1980s!), the rate of growth has been easing across most of the capital cities. While growth has likely peaked, home values across capital city and ‘rest of the market’ regions have not yet reached the peak, leading speculation that this may occur in 2022 and begin the start of a property downturn.

In this article, we break down the trends to watch out for, as well as what to expect in 2022 for Australian house prices.

When will Australian house prices peak?

According to Tim Lawless, CoreLogic’s Research Director, there are several trends to look out for to know if property prices have reached the top - and when the downturn will begin.

Consistent trend in negative monthly movements

At the moment, the quarterly trend of Australian house values across capital cities continues to grow and remains positive - except in Darwin which is the only capital city housing sector to record a negative quarterly change.

Corelogic home values

The Australian property markets have not ‘peaked’ yet, but have moved through a peak rate of growth

The peak rate of growth refers to the point at which markets achieved their biggest monthly growth rate. This happened around March last year (an exponential growth you may recall flooding media headlines at this time).

According to CoreLogic, across the capital cities:

  • The monthly growth rate of Sydney home prices monthly peaked at 3.7% in March and has since reduced to 0.3%. It is expected that Sydney may hit the peak later this year, yet this remains uncertain.
  • Melbourne home prices saw its monthly growth rate peaking at 2.4% in March, reducing to -0.1% in December (the first monthly decline since Oct 2020). It is expected that Melbourne will also hit the peak later in the year, but the timing is uncertain.
  • Perth’s monthly growth rate peaked at 2.7% in February. After recording only a single month of decline (-0.1% in Oct 2021) the monthly rate of growth has reaccelerated to reach 0.4% in December
  • Hobart’s monthly growth rate peaked at 3.3% in March and dropped to 1.0% in December
  • Darwin moved through a peak rate of monthly growth in April at 2.7% (0.6% in December)
  • Canberra moved through a monthly peak in March at 2.8% (0.9% in December)
  • Queensland, Brisbane, regional QLD and Adelaide remain the only broad regions where house prices have so far avoided the slowdown in the pace of growth. The reasons are multifaceted, with affordability a much lower constraint compared to larger capital city markets such as Sydney and Melbourne, in addition to lower advertised stock levels and a continued upward trajectory in demographic trend as buyers continue to flock toward lifestyle oriented and (comparably) more affordable housing.

3 factors that will determine when Australian home prices will peak

• Policy-related factors such as interest rates and credit availability • Market factors like the trend in advertised stock levels and housing affordability • Economic factors such as labour market conditions and wages growth

Upside Realty sold property
More homes sold in the second last week of December 2021 than in other week that year

At the present time, the Australian property market is gradually easing back from a historically high starting point. Here are a few metrics to be on the lookout for in the coming months that will indicate a market peak - and following on from that, a decline.

  • Are home values starting to slow down in their growth over time? Housing growth trends will gradually slow before moving into a correction phase (what we’re seeing at the moment), but it’s important to note that periods of shock, such as early in the pandemic, can also cause housing trends to turn very sharply into negative territory
  • Are there more and more homes available for sale in your area? Rising advertised stock levels are a signal that there could begin to be more stock to level out demand
  • Are more and more buyers priced out of the market? Affordability constraints could reign in buyer demand pushing up property price growth
  • Weakening auction clearance rates
  • Softening vendor metrics such as longer days on market and larger levels of discounting
  • Macro factors that have an impact on housing demand, such as higher interest rates or tighter credit policies

Australian property market outlook for 2022

Australian property market 2022 predictions

Want to sell a property in 2022?

If the last weeks of December 2021 (seasonally a much quieter time for the real estate market) is any indication of buyer demand, then there is still a huge surplus of buyers out there - which means a genuine opportunity to get a premium price for your property if you’re looking to sell in 2022.

We are still seeing a very busy market, with strong interest from buyers to make a move this year, but you need to act quickly.

If you would like to find out what your property is worth, get a free property appraisal from your Upside agent today!

Upside

Upside is an Australian-owned, full-service real estate agency with local real estate agents, low fixed fees and zero commission. Our standard is other agents’ ‘extras’, delivering vendors a complete agent managed service including a full appraisal, open home management, copywriting, photography, signage and advertising. It's the way real estate should be.

House prices are on the rise.
Find out the value of your property now.

Get a free online property report from Upside Realty.
It takes seconds.
Property report preview