What 2022 could look like for property:
Updated: Nov 11, 2022
Sydney and Melbourne are losing some cream off the top as values continue to slide further, however, Dr. Andrew Wilson from My Housing Market is forecasting only a 6% drop over 2022. Brisbane, Adelaide and Perth should finish the year with 11%, 12% and 9% growth respectively.
Although there has been some negatives in the market like some aggressive interest rate rises and soaring construction costs, there are still the underlying fundamental growth factors. Unemployment levels are at record lows which is one of the reasons the permanent migration cap was increased to 195,000. Also hundreds of thousands of international students will be coming back to Australia. These people need somewhere to live. This along with extremely tight vacancies in most cities, Adelaide is at a stagering 0.3%, this will mean rents will continue to increase and put upward pressure on property values.
There are going to be some great opportunities for development projects in the coming months. With a hole forming in the construction pipeline as building approvals fall by 17%, I suspect there will be low supply of newly built properties. This will take some time to happen as builder's books are still full right now, but over the next 12-24 months we should see some easing of their loads. A property development can take 12-18 months to complete, and it certainly has been taking longer recently, but this may tie in nicely with the forthcoming "hole".
We have had some good traction over the last month with 2 of our projects starting construction on site which is great news. If you are looking to get into a project or have any questions about the process, reach out. You don't make money sitting on the side line.