JANUARY PROPERTY REPORT
Hello and welcome to 2022! Some of you may still be away as quite a number of families are enjoying this ‘shadow lockdown’ period on an extended holiday vacation. Whether it be camping, or laying by a beach somewhere, the question on everyone’s mind is, has the market cooled? Coming into our third year of Covid is met with some level of uncertainty, but still with a fairly positive outlook.
Predicting the market at the start of each year generally takes time, and in some cases, it’s harder to tell whether there’s more demand for rapid antigen tests or properties. But the general market sentiment moving forward is that it will remain steady across the board with volatility cooling over the coming months. Reflecting on last year, house prices increased more than 20%, essentially 2 years growth in 1 year, accelerating the market forward and increasing demand. As an example, the suburb of Eltham increased by 9% in only 1 quarter. To put that into picture for a home worth $1mil in October, by Christmas it would have gone up $90,000, that’s basically $1000 a day!
However despite the growth there is a growing concern that affordability constraints have reached their peak. If tighter lending criteria comes to the fore and the federal election is called before May, Autumn may experience a stagnate growth period. This may be a great time for first home buyers to consider their options for 2022 as we saw 16 percent less first home buyers look for properties in 2021.
According to the Real Estate Institute of Victoria, Yarra Glen’s median house price is $950,000 with an annual increase of 24.9%. Whereas Kinglake’s median is $875,000 with a quarterly price change of 17.8%. That’s right, quarterly! Although Healesville’s quarterly growth was minimal, it enjoyed a steady median house price at $765,000. In contrast, the Metropolitan average still floats around $1.12mil and the regional average sits at $601,000.
Another trend to monitor is new investors. With fundamental changes to regulations across the board Landlords are being forced to comply. This isn’t necessarily a bad thing, but it does mean than these tighter measures are causing older properties to become non-compliant. However in this new world a fresh group of younger investors or ‘Property Providers’ are diversifying their portfolio and buying investments, which hopefully translates to more availability of rentals to assist in the housing crisis.
Regardless of whether you’re buying, selling or renting, our lives have had a paradigm shift in how we live, work and consume. This long lasting effect on the economy will still fuel the work from home movement for the next couple of years, which in turn will provide more balance to the market as a whole. With new stock in consumer goods becoming available and a solid supply of properties hitting the market midsummer, we should see a return to steady price growth. This key factor will create greater price resiliency for the industry, strengthen the market and build upon the foundation for the future.