Growth Forecast Of Apartment Prices In Sydney In 2022

Despite the pandemic, the housing markets in Australia saw a striking increase in Sydney apartment prices in 2022 and 2021. The pace of inflation in house prices is moderate as property rates rise continuously in practically every market throughout the country. 

The Australian Prudential Regulation Authority (APRA) is looking forward to slowing down the housing markets. However, by all indications, Sydney’s housing market will be difficult to predict in 2022. 

Sydney housing prices increased by 22.2 percent in 2021, the highest yearly increase since 1989. While that of Melbourne increased by 14.9 percent, and Brisbane by 29.2 percent. This is due to lowered loan rates, substantial domestic investment, fiscal stimulus, and minimal listings. 

Sydney Property Market Analysis 

However, since last year’s March spike, the pace of increase has slowed down a bit. Nevertheless, property prices are expected to rise in 2022, although at a considerably moderate tempo. 

According to Chief Economists, affordability limits, escalating mortgage interest rates, and stricter lending criteria dampen purchaser demand and growth in rates. 

Experts predict that the property and Sydney house prices will level off later in 2022. This will lead to price drops even in 2023, with the expectations of a spike in interest rates. 

A rise of another 6% in Sydney apartment prices in 2022 can be seen in just the first six months of the year. In contrast, it is expected that the capital city will see a flattened growth and decline of 4% by the last quarter of the year. 

With the borders reopening, the arrival of newcomers, and ex-pats returning, the property demands are expected to rise. But, this wouldn’t be sufficient to reverse the weakening property market. At the same time, the primary driver of pricing will once again be the interest rates. 

Sydney Property Market Trends: Houses And Apartments 

The Ever-Increasing Buyers’ Demands

As Australia is experiencing price growth in terms of property, auction clearance prices also remain high. This is a property boom. As a result, the existing fear of missing out will drive more buyers in, as they would want to invest in the housing market before they are priced out. 

With the lowest borrowing costs in a while and RBA’s pledge that the interest rates won’t rise much, the demand from buyers is expected to stay high through 2022.

Property Investors vs First-Time Home Buyers

Property investors are re-entering real estate due to low-interest rates and relaxations in lending restrictions. This, in turn, will squeeze out first-time home buyers. 

Whether you’re a first home buyer or an investor, Quarter Acre provides research and data-based property consultancy services to get you started. 

Australian Market: A Hospitable Investment Environment

The Australian market has low mortgage rates, hyped consumer confidence, economic growth, and a balanced demand-supply ratio. As a result, the Sydney apartment prices in 2022 will continue to soar high.

“Covid Times”: The New Black

The covid outbreak has made preparedness one of the biggest essentials for living and survival. People are ready to spend extra on the right type of neighborhood and house. Keeping their long term plans in mind, they want work, entertainment, and every day needs under one umbrella, 

Aussies are looking forward to upgrading their lifestyle post covid lockdowns. Tenants are shifting from small dingy apartments to better localities equipped with all facilities. The massive overflow of rental units facilitates the shift. 

Increased Demand For Expensive Property

Except for the expensive inner-city apartments, the housing cycle is experiencing overall growth in Sydney apartment prices in 2022. However, the upper property strata of the real estate market are currently driving housing values growth in 2022. 

What Does The Sydney Apartment Market Look Like? 

As expensive house purchasers turn their eyes to units, Sydney apartment prices in 2022 are picking up steam. Moreover, the rates in certain areas will soar by six figures within the first three months of 2022. 

According to news.com.au, apartment prices recorded 3.2% highs in the last quarter. Unit prices among the northern beaches have risen to $1.16 million in the first quarter. Rates in South Wales have also reached a new high of $568,500. 

With a historic price difference between houses and apartments in Sydney – the overall median home price is about 80% higher. More purchasers are likely to go for apartments, looking at the Sydney apartment prices in 2022. This is because they see the better value, especially in investor areas. 

Key Highlights 

• As per Domain, there are promising buying chances, with valuations rising beyond last year. This indicates that many homeowners are considering selling off their property this year. It will normalize the overall number of properties for sale in the market. 
• However, data shows that beachside locations continue to gain popularity. For example, property prices in Somers and Byron Bay have seen an increase of 69% and 58%, respectively. 
• The market is seen as a “landlord’s market” across most big cities and throughout regional Australia.
• As per economists, interest rate hikes are highly expected in 2022.
• Upsurge in rents and growth has benefitted the investors significantly and will continue with gradually rising prices. 
• Sydney apartment prices in 2022 are not likely to rise around the same cash rate as in 2021. This is because stricter financing limits buyers leverage while the pay rises aren’t keeping up with the price growth. 
• Research projects that the rental market will be vulnerable to tightening with the reopening of international borders. This will happen due to the student population and overseas migration in Sydney and Melbourne.