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What’s the outlook for the local property market for 2022 and beyond?

Property

What’s the outlook for the local property market for 2022 and beyond?

The pandemic has fuelled many lifestyle changes, such as working from home, which are shaping the preferred location of homes.

CoreLogic’s research director Tim Lawless says employment growth, the long-term benefits of hosting the Olympics and the extra infrastructure building that will occur, along with liveability factors, will be among the reasons migration to southeast Queensland will continue and investors will keep entering the property market.

Author and property investment advisor Michael Yardney says with this in mind, buyers will be seeking quality properties with an increased emphasis on liveability. He predicts some buyers will be willing to pay a little more for properties with a little more space and security, but it won’t be just the property itself that will need to meet these newly evolved needs – a ‘liveable’ location will play a big part too.

Those who can afford it will pay a premium for the ability to work, live and play within a 20-minute drive, bike ride or walk from home. They will look for things such as shopping, services, education, and community and recreational facilities, and some jobs all within 20 minutes’ reach. The Sunshine Coast’s air links to Sydney and Melbourne also enhance appeal.

Ray White Maroochydore agent Pam Thomas says despite interest rate rises, quality properties are still selling well. Although her usual market is apartments, she says she has listed a number of different-sized homes with owners citing various reasons for their sale.

CoreLogic’s figures show that for properties on the Sunshine Coast, length of time on the market has risen from 13 days to 27. But the slowdown has not stopped prices from rising, with a 6.4 per cent increase measured in the first months of 2022. What will happen next to will be largely shaped by the speed and extent of interest rate tightenings, but there are still many positive factors underpinning our housing market, which means a property crash is unlikely to occur.

Mr Yardney sees the cash rate lifting to 2.35 per cent by mid-2023, while the market is expecting it to reach close to 3.25 per cent. He says that while fixed rates have already risen sharply, the steep increases in the cash rate will flow through to variable mortgage rates, lifting minimum repayments significantly and reducing borrowing power.

In wrapping up the Labor Government’s initiatives, CoreLogic’s Tim Lawless says the headline ‘Help to Buy’ scheme is likely to be popular with prospective homebuyers, as it provides a more affordable entry point to the Australian housing market for those individuals on low- to mid-level incomes. He says this will contribute to more equality in rates of home ownership across income cohorts and could create more opportunities for key workers to live in more central areas.

Prices continue to rise

The Sunshine Coast, stretching north to Noosa and south to Caloundra, has the highest median house price of any regional area in the country at about $1 million, after prices rose about 50 per cent through the pandemic. CoreLogic’s figures show that slowdown of Sunshine Coast property has not stopped prices from rising, with a 6.4 per cent increase measured in the first months of 2022. That’s a $68,000 increase if the house started the year at $600,000.

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