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The property markets are up and running for 2022.
In fact the 2022 auction market kicked off early with 448 capital city homes being taken to auction last week.
However, these sales are not a good indication of overall market sentiment as they generally occurred in seaside and holiday locations.
The number of homes taken to auction will continue to rise overcoming weeks with over 1150 auctions expected to be held next week compared to the 884 over the same week last year.
Our experience at Metropole and speaking with agents across Australia reveals continuing pent-up demand from both homebuyers and property investors.
Remember home buyers are sellers, and sellers are buyers and therefore for all those properties sold at the end of last year there are now vendors who have to find new accommodation.
Not surprisingly there is little property data for the week ending January 24th with the housing market moving through the usual seasonal slowdown in transaction activity.
However, Corelogics Property Market Indicator report revealed a 0.8% lift in the value of dwellings across the five largest capital cities over the month of January 2022 so far, including a 0.2% rise across Melbourne dwelling values, which had fallen through December.
Value changes across the capital cities continued to be led by Brisbane and Adelaide
Strong value growth across Brisbane, as well as a more positive outlook for Queensland dwelling values more broadly for 2022, may be supporting an uplift in vendor activity with n ew listings advertised in Brisbane over the past four weeks being 20.6% higher than in the equivalent period of 2021.
As I said, its still too early in the year with too little data to really gauge how our markets are performing, however in the coming weeks when auctions return, well receive a timely read of housing demand as we emerge from the holiday period.
Heres whats happening to property prices so far this year
property prices rose 0.2% over the last week, 0.7% for the month of January to date, and up 25.9% over the last 12 months. remained flat over the last week, and are up 0.2% in the month of January so far, and up 15.1% over the last 12 months. increased 0.5% over the last week, up 1.9% for the month to date, and 28.7% over the last year.
To help keep you up-to-date with all thats happening in property, here is my updated weekly analysis of data and charts as of January 24th, 2022 provided by Corelogic, and realestate.com.au.
The number of properties for sale in Australia is still in short supply
Despite the many properties that came onto the market at the end of last year, the supply of properties for sale just cant keep up with demand.
At the end of last year for every new property coming onto the market for sale in most parts of Australia 1.4 properties were sold.
Its likely 2022 will see buyers out in force owner-occupiers, investors, and first home buyers at a time when available supply struggling to keep up.
And remember that buyers are sellers and sellers are buyers so in most cases each time a property is sold another buyer is out in the market looking for a new home.
The table below shows how the stock of advertised properties is well below year-ago levels across all capital cities.
At the same time time on market continues to decline.
These are signs that property values will continue to rise moving forward.
Median property prices
Vendor metrics confirm that despite the increased number of properties being listed for sale were in a sellers market with the number of days to sell the property very low (a sign of the tight supply situation), and vendor discounting (it’s easier for them to sell) at very low levels.
In general, houses are selling better than apartments, but the shortage of good properties on the market is seeing properties selling quickly with minimal discounting.
January 2022 Market Indicator Report
Australia’s property market delivered a solid finish to what was an extremely strong year according to Proptracks January 2022 Housing Market Indicators Report
December saw a surge in market activity as many vendors, who had delayed listing during lockdowns, raced to sell by year end. Buyers responded, with more properties selling in the second last week of December than in any other week in 2021.
While buyer demand remains strong, there are signs the market is moderating and the number of searches and enquiries to buy have been trending down since October.
Despite this, properties that were listed for sale in December continued to sell at close to record speeds.
Following the seasonal lull brought on by the holidays, buyer and seller activity is predicted to pick up in the second half of January. Price growth, which was in excess of 20% over the past 12 months, is likely to have peaked, with more modest growth forecast over 2022.
Across every state and territory, the number of searches on realestate.com.au to buy property fell over the fourth quarter of 2021.
Our Rental Markets
Nationally, dwelling rents increased by 9.4% over the 2021 calendar year.
Unit rents were up 7.5% over the year compared to the 10.1% lift recorded in house rents.
Rental growth trends across the unit sector have generally been milder than houses, with unit rentals being disproportionately affected by stalled overseas migration as well as domestic rental preferences shifting away from higher density options through the pandemic.
However, these trends are starting to change as rental affordability diverts demand back towards the unit sector.
In Melbourne, where unit rents fell by -8.5% between March 2020 and May 2021, higher density rental markets are now recording a faster rate of growth than houses, with Melbourne unit rents recording a 1.6% quarterly increase compared to the 0.9% rise seen in house rents.
The tightest capital city rental market over the year has been Darwin, where dwelling rents rose 15.2%.
Conditions have eased a little over the second half of the year, with annual rental growth moving through a peak of 22.3% over the 12 months ending August.
Although rents have surged across the northern most capital, Darwin’s rental index remains 7.6% below its 2014 peak; a legacy of the 26.3% decline in rents recorded between March 2014 and December 2019.
With national housing values recording an annual rise of 22.1% compared with a 9.4% rise in rents, rental yields have decreased as a natural consequence.
Gross rental yields fell to a new record low across Australia, reaching 3.2% in December.
The lowest yields, by some margin, remain in Sydney (2.4%) and Melbourne (2.7%), however, with the exception of Perth and Darwin, every capital city is recording record low yields.
Weekends auction clearance rates
The auction market started early in 2022 with 144 homes taken to auction across Melbourne this week, making it the busiest auction market in terms of volume.
Auction clearance rates were generally higher across the smaller capitals continuing the strong trend observed throughout late last year.
Source of graphs and data: CoreLogic, REA
Sure the markets are moving on, but not all properties are going to increase in value. Now, more than ever, correct property selection will be critical.
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‘This week’s Australian Property Market Update – Latest Data, State by State January 24th 2022’ have 48 comments
Hi Michael, I am looking to buy investment property and planning to live in it in the next 5 years, what is the best area for capital growth near Liverpool or Campbelltown
Kay even within the 2 suburbs youve mentioned there are areas that will outperform other neighbourhoods and then there are A, B and C grade properties just naming a suburb could lead you astray so I never do that sorry
Great update Michael, I always get great value from reading your blog.
People are buying properties now without proper planning or structure. We have potential clients calling us wanting to set up a SMSF within half an our and without a statement of advice or proper planning. Also some clients dont know which entity to buy their investment properties under and why. I wander if you can include in future blogs about these issues and some tips etc. this will help people avert costly mistakes. Cheers
Thanks Michael I agree, starting with a plan is important and you are correct, many beginning investors think they can just set up an SMSF without correct and independent advice and thats just not right is it?
I am considering buying an investment house on the north beaches of Cairns. Is it still a good time after this years growth in price?
I dont know your personal circumstances so cant give you investment advice, but my general advice would be that Cairns is definitely not a good investment grade location.
It might be a lovely place to vacation and even a good place to live, but the market is too small to be investment grade. Steer clear of it
I have a nice house in Baulkham Hills. I want to sell and move up north and out of Sydney. Should I wait till this lock down is over or do it now. I can wait a couple of months if needed but want to get the best price. I am also worried about once I sell how can I move as Sydney is locked down!
Luke – thats a real dilemma isnt it? It could be difficult put your property on the market now, during lockdown. The ones being sold at present have been on the market for a little while. Similarly there will be little stock for you to look at in the next few weeks. It seems to make sense to wait a month or two till the waters are calmer
Thank you Michael and team for the informative and interesting data sets and commentary. There is one thing that does make it slightly harder to get full value is that the Gold Coast (where I live and invest) is rarely mentioned and or lumped in with Brisbane. It’s a completely different market in so many ways, let alone a city of 660,000 which makes it bigger than Hobart, Canberra, and Darwin. The median prices on the Gold Coast, let alone Rental data is significantly different to Brisbane (which no doubt includes Ipswich, Moreton shire and surrounds).
The demand for housing on the Gold Coast (and Sunshine Coast) is certainly higher than Brisbane. Would be appreciated if your data included Australia’s 6 largest city as well as the smaller capitals already mentioned.
I understand your frustration, however Im just reporting with the data houses report, and they rarely give details of the Gold Coast market on its own
Hi Micheal, My name is Sarah I was thinking of buying in Norlane, Geelong, Victoria. Could you see a real growth in this suburb.?
Sarah, Im glad youre considering getting involved in the property market, but this is a very shallow question.
To ensure you dont make a mistake we must answer ask much deeper questions and I must know a lot more about you. You are making the typical mistake of starting with a location or a property rather than the big picture plan that strategic investors use.
For example I dont know whether this is for your home or as an investment. I dont know your budget, your risk profile, or your timeframes. For what its worth… Norlane is not on my radar
Hes not on my radar
Really trustworthy blog. Please keep updating with great posts like this one. I believe choosing right property management company and investing in real estate is not easy task. After reading this I am a little bit clearer about this and going to read again to get the full meaning.
Keep sharing, Thank you.
I have been following your blog for years, I want to buy investment property in melbourne between, 600 to 700k, options are either craigieburn side or diametrically opposite in Frankston / Seaford. One of other melbourne blogger I follow said on a video log that dont go beyond carrum coz its too far. Any thoughts? Where would I get better return between the two
Youre making them same mistake most beginning investors make and thats why they never get past there first or second property.
Youre starting with a location rather than with a strategic plan (I guess Im making some assumptions here) so it would be terribly wrong to answer your question without understanding what your endgame is, what your risk profile is, what your cash flow situation is, what your long-term plans are etc etc — there are at least 10 other factors we have to take into consideration before making a recommendation
Having said that we have helped many clients over the last couple of months my great investment properties in your budget range yet I would not consider either of the two options you mentioned. Would you like my team at Metropole to help you? If so please leave your details here and discover your options
I am struggling to understand the graphs regarding demand for owning homes and rental properties. What form of measurement is the index relative to? How can the total number of renters and buyers not be an addition of both units and houses?
overall about 70% of Australian one there own home around 50% without a mortgage.
Around 26% of our population rent their property and around 4% are in some form of social or public housing
What a great resource you are! I have a property in Bulimba that I am thinking of selling to free up some cash. I have had it for 6 years but I feel I am pulling the trigger too soon. Any thoughts maestro?
Property values in Bulimba are likely to keep rising for another year or 2, so it really depends on what you are planning to do with the cash maybe it would be better to refinance and access your equity.
SO you needs to work the numbers carefully thats what we do when we build a Strategic Property Plan for our clients
Our syndicate is a small time developer/investors. Lately I am focusing at St Marys, NSW.
The price of a townhouse yet to pickup even though with the Western Sydney airport and St Marys being the main interchange. Is there a reason for that?. We just bought a land to build 12 townhouses (yet to go through DA application).
There is no reason for property values to rise just because theres a new airport coming up. No one wakes up in the morning and things i want to live near an airport I wouldnt be investing in those locations that have always underperformed
they might however wakeup and think they may get a job at the airport, or other associated industry feeding off the airport, and would like to live closer to work? in Brisbane we have seen a lot of industry relocate to be closer to the airport and the new second runway, so as to be closer to air freight services, particularly international. I would be surprised if the additional infrastructure that pops up around the airport doesnt equate to capital growth in the long term. I also think a lot of businesses might relocate around the area again that would benefit from being close to an airport and the air freight services available. Land initially will be cheaper for these businesses as another incentive, till the infill development takes overproximity to employment nodes and infrastructure investment and development are factors taken into consideration when identifying future capital growth of an area, particularly new Greenfield areas. They are considered traditionally more risky, which is why you really have to do your research when buying into these areas.
I have friends who are valuers and who ran their own real estate training college who pleaded with me not to buy in the meadows estate in Pimpama. Why are you buying there? one said. Theres no jobs there! One told me Springfield was a better bet, if I was going to go that far out from Brisbane. The property is leased to a single mother who works as a nurse at the new Gold Coast university hospital, she absolutely loves the area! They seem to be building a new school every 6 months when I go down there. When the pandemic hit the median house price took a $30,000.00 dollar hit . I brought the property on dixon eve 6 yrs ago for $460,000, the last two sales in the street for the last two months have sold for $620,000. and as at December sales in surrounding streets are still going up. While the pandemic and record low interest rates combined with government stimulus packages have contributed to this growth (as has the entire property market), its still not bad for an area that was cowpasture not that long ago. While I agree with Michael that airports and major road infrastructure may not necessarily guarantee future capital growth, seeing as how you have already put your hard earned cash into this project development, I believe you can take heart from my experience. I have also just looked up an article about the metro link rail connection being built from the airport to st Marys, looks like the NSW government is throwing serious money at this area, with more govt investment to come I would be shocked if these developments didnt appreciate in the next 5-10 yrs as forecast in the article. Time is the great leveller of all things, and sometimes even the experts dont always get it rightthats why predictions and forecasts are so difficult in real estate. The internet is full of false prophecies, not the least of which come from expert analysts that forecast for the big 4 banksCovid was going to cause a housing market crash remember!
Thanks for leaving a detailed comments. You cant compare the second airport in Sydney with the second runway in Brisbane as an airport which is very close to the CBD. I have no doubt that the outer suburbs will increase in value, the problem is that they will underperform the better locations, and if you could only afford to buy one to (or even three or four properties) in your journey I believe you should buy the best locations
Hi. Love your website, fantastic resource. I recently moved to Oz, so figuring out lay of the land and me and my partner are currently figuring out where we want to base ourselves. I have $200k in savings that I had earmarked for a property, and wondering if I can make this work for me in an investment sense. Not sure where Id even start on this journey as I have no experience. Any advice very welcome. Thanks Michael. 🙂
Joe since youre new to Australia seek independent professional advice. Are you an Australian citizen or permanent resident that makes a huge difference in the type of property you can buy
Hi Michael, we’ve had a townhouse in Kedron for 5 years that we purchased for $520k and is only valued at $580k. It’s neutrally geared would you suggest selling to look at land / something with more CG potential or better to hold for longer?
Lisa Kedron is a good area but clearly your property has underperformed. There are a number of different neighbourhoods in Kedron some of which do not perform as well as others and obviously some properties in these locations will outperform others. There are too many variables to take into account for me to answer this correctly without a lot more information, but we have some spreadsheets and frameworks we can use to help give you the right answer.if youd like help making the decision, please email me michael at metropole.com.au and Ill set things up for you
Im interested to get your thoughts on Newcastle and Hunter Region areas. Newcastle now has the 4th highest median property price in the country. Massive growth opportunity (area) or have people missed the boat?
Rod, theres no doubt the Newcastle in the Hunter region great locations to live, but I have found in the past when locations grow too fast, they then revert back.
Just see what happens when Brisbane property prices were almost the same as Sydney a couple of decades ago and are now half of Sydney and similarly when Perths median property price was almost the same as Sydneys and is now half of Sydneys median price.
At the price you would have to pay to get investment great properties in Newcastle, I think theyre better long-term opportunities elsewhere.
In the past couple of days it has been reported an increase of 18% in Perths property market 2021 2023. After years of negative growth and lowest house prices across the nation, could you provide some comments on why such a big % increase is expected and will it last? Many thanks Richard
Richard, I didnt make that forecast so I cant really comment. Who did? Possibly an expert chasing a headline.
Dont believe all the forecast you hear. Think about it – did all those forecasts experts made at the beginning of this year come true?
I wish Core Logic would present current statistics, and not ones which are 2-3 months old. A lot has happened since August. I also appreciate that your focus is the big markets of Sydney and Melbourne, but perhaps these posts could improve with a contribution from expert writers who know something about the rebounding regional markets not just the major state capitals?
Ben thanks for your thoughts. Much of this Corelogic data is updated weekly.
Youre right we dont cover the the regional market much do we.
I found this blog pretty helpful. It’s really sad to see the kind of impact Covid-19 has had on all the sectors and specifically the real estate sector. I personally feel that the sudden re-appearance of Covid cases in Australia may lead to a further decline in the property prices and may take a while to bounce back. The future is always uncertain and unreliable. Luckily, I came across a real estate agent Broadbeach who is a great advisor with excellent market knowledge. I will be taking his help in making my investment decision for the right property at the right time because the current scenario doesn’t seem to be going well for making investment decisions and without the proper guidance from a real estate advisory help, property investment may be risky.
Linnet yes its a shame whats happened to our beautiful country be careful, most Real Estate agents are great at selling properties but very, very poor at giving investment advice. They are not licensed to, nor trained to and should not even ventured down that path. In todays very challenging market to be careful who you seek advice from
The spike in search for property listings is not due to interested buyers but by an increase in distressed sellers checking out what their failed investment is now worth on READ and how much they have lost. Winter should normally be quiet season for property sales. It is unusual to see an increase in property sales volumes in winter. Can only be explained by distressed sellers
I can see why you might come to that conclusion by looking at one stat in isolation thats why we look at the complete picture and Corelogic and independently Dr. Andre Wilson keep track of buyers and transactions there ARE more genuine buyers around. REA believes so also becuase they keep coming back to the same property on search
With the record levels of existing household debt, falling real wages, rising permanent unemployment, contracting bank credit, declining immigration, contracting GDP, depletion, of superannuation, ineffectiveness of the first home buyer and other assistance schemes (only leads to inflated prices) absence of investors, over supply of units (of dubious quality) abismal rental prospects, 1.2 million vacant properties and a persistent declining world economy, why would I expect the general property market to rise. Granted premium properties will hold up but what about the vast new estates and over valued areas like Perth and Darwin? What happens when the present support schemes finish in Sept or later next year. What happens when the supposed V shaped recovery turns out to be an L with stagflation and real unemployment/under employment >8%. We cant all afford to buy in Middle Park? And what happens when interest rates rise in the next 5 6 years.?
Get real! I would appreciate an answer. Maybe I an wrong.
Thanks for your comment Geoff- I agree with all the issues that you have mentioned – there are a lot of headwinds that will hold back your economy and our property markets.
But there isnt one Australian property market, and interestingly there are still a number of suburbs where property values are increasing in value, well outperforming the averages (I guess thats how averages work – some outperform and some are underperform)
Ive always learnt taking a long-term perspective is important when investing, and Im not really sure that in this particular blog I suggest of the property market is going to increase in the short-term – in fact I said the opposite.
With regard to your comment about interest rates. I really hope they will increase in a few years time, because the only reason interest rates are going to increase is because our economy will be booming, property values will be increasing, unemployment will be very low and wages will have risen considerably. So the RBA will need to raise interest rates to slow down the boom. thats the economic cycle
IN todays report you quote Sydney house values increased by 0.3% last month (+15.8% over the last year) however the reported data in the ear;y part of the report and the news states that values fell by 0.4%? Can you help me understand the difference between the two stats against the same apparent period.
I update the top section of this blog weekly and the lower half, state by state section monthly