Supply And Demand Change In 2022
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What is the main topic discussed in this episode?
It's The Real Estate Podcast brought to you by Ray White, the largest real estate and property group in Australasia.
And welcome to another episode of The Real Estate Podcast. Property, property, property. It's in our DNA here at The Real Estate Podcast as we interview leading contributors to the real estate industry.
What is the current state of the Australian housing market at the start of 2022?
Deals are being done every hour, every 10 minutes and every 90 seconds somewhere across Australia. Actually, Rich, I don't know if deals are done every 90 seconds or not, but it does sound possible. Well, they actually are.
I quickly calculated the numbers, Craig, before you started. And around 500,000 properties are transacted every single year in Australia. And if you divide that by the number of seconds in a year, it's actually about one done every 63 seconds.
Wow. Okay. Thanks for telling us that. Okay.
How did 2021's supply-and-demand imbalance create a ‘white hot’ market?
So joining us is Rich Harvey from Property Buyer. We know that it's a hot market. How are you finding the start of 2022? Well, it's interesting.
2021 was a crazy hot year. So I think in 2022, we're going to start to see the market still growing, but at a much slower rate. It's not going to see that white hot market and that really frenetic activity where we saw you know, 13 bidders at an auction every time and prices going well above reserve. I think there'll be a much more subdued market. There'll be a lot more listings and the buyers will finally have choice.
How does Rich forecast interest rates and market growth through 2022?
So I think we're going to see a more normalised and balanced market, particularly as we head toward the second half of 2022.
You would have been glad to have had that time out with family at Christmas time and just, you know, a little bit of recalibration.
Absolutely. It was been a frenetic year and just really enjoyed the downtime. It was wonderful.
And where do you see the market going long term into 2022?
I think interest rates will stay on hold, Craig, for the majority of all for 2022. The Reserve Bank has said that there's no rush to raise rates until wages and inflation is sustainably higher than it currently is. And obviously we've got a post-COVID recovery to get through. Even though some businesses have done very well, there's others that have done very badly and been significantly affected.
What causes the seesaw swing between listing volumes and buyer demand?
So in terms of how that translates into the property market, there was an incredibly hot demand, particularly during lockdowns when there was very little stock available. And we had people making major lifestyle changes and wanting better quality properties, their demand rose around 25% above normal, but listing volumes were down 30%. So you had this incredible seesaw imbalance between supply and demand during 2021. So what I'm saying is that that seesaw is going to swing back the other way in 2022. And as I said, buyers should have a bit more choice and a bit more opportunity. So I think you probably see a growth rate in Sydney and Melbourne around 5%, maybe pushing seven, but by the end of the year, I think it'll start to slow down a
You know, people, particularly first home buyers listening to the podcast right now are thinking, Rich is their new best friend. More stock. It's like Christmas time, isn't it? They'll be really hoping that that is the case, which kind of leads into this question. What would you say to people who think that they have completely and utterly missed the boat with the property market in 2022?
How much growth does Rich expect for Sydney and Melbourne in 2022?
Look, I get asked this question every day. Have I missed the boat? Should I buy now or should I wait? The problem with waiting to buy real estate is that the boat will get further and further away from the shore. So I say to people, get on the boat. Whether you think the market's at the peak or you think it's at the bottom, it's not irrelevant, but it's not as important as using your borrowing power and your buying power to get onto a rung of the property ladder. I'm out there buying myself right now. People would go, Rich, you're crazy. It's the top of the market. Well, I'm still finding opportunities. So when you have the ability to buy and get into the market and everyone needs a roof over their head and everyone should be thinking about investing in property because we're not building enough in this country, I would say to people, you haven't missed the boat.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:02–0:22
2
What is the current state of the Australian housing market at the start of 2022?
0:22–0:53
3
How did 2021's supply-and-demand imbalance create a ‘white hot’ market?
0:53–1:28
4
How does Rich forecast interest rates and market growth through 2022?
1:28–2:14
5
What causes the seesaw swing between listing volumes and buyer demand?
2:14–3:21
6
How much growth does Rich expect for Sydney and Melbourne in 2022?
3:21–4:12
7
Have first-time buyers ‘missed the boat’ and what should they do now?
4:12–5:16
8
How can buyers use stepping-stone strategies and adjust location expectations?
5:16–6:11
Speakers
3 identifiedMore from Aussie Real Estate Podcast
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Australia Property Market Slowing: Interest Rates Impact Sydney and Melbourne Growth
How Higher Interest Rates Are Changing Property Buying in Australia: First-Home Buyers and Investors Respond
Melbourne Property Market Distortion: First-Home Buyer Stamp Duty Cap Driving Price Pressure
Australia Housing Market Stability: Low Mortgage Arrears and Minimal Negative Equity Explained
Australia Property Prices Rising: Construction Costs, Materials and Fuel Driving the Market