Real estate 2022 forecast: Property market quirks homebuyers and sellers need to know

Hybrid auctions, bumpy price growth and an investor surge are just three of the market factors, homebuyers and sellers will need to understand this year.

After a stunning 2021, in which home values rose by around 20 per cent in most markets around the country, 2022 has started with plenty of question swirling over it, with a federal election due by late March and interest rates set to rise.

Here’s what leading industry expert Tom Panos is predicting will happen in real estate this year.

REAL ESTATE FORECAST 2022: TOM PANOS PREDICTS

Hybrid Auctions

Face-to-face auctions will be conducted in conjunction with online bidding options (at least until Omicron is under control). There are early signs that Omicron does not appear to be a hindrance to buyer appetite.

Prices to slow

As expected, real estate prices soared by 20 per cent last year. In Sydney, it was over 25 per cent. Late last year they say the market slowed dramatically and in 2022, the market will be far more balanced.

Home price growth will slow but don’t expect a crash. Photo: David Swift

Don’t expect prices to be crashing anytime soon.

We have an election coming and the government will ensure that property owners are feeling confident about the value of their family home.

Inner-city unit opportunities

When international students left Australia at the beginning of the pandemic, and the workforce moved from the city to the suburbs, units not only didn’t go up in price (like houses), many actually declined.

After Omicron peaks, students will return and the value of units as a property investment will be attractive again.

Rents are back

Over the past year or two, we have seen high vacancy rates and rent plummet in areas within 15km of the CBD.

It now appears we are entering a new cycle and some properties are getting heated bidding in tenancy applications again.

Rents will slowly start creeping up again.

Tom Panos in his role as auctioneer. Picture: John Appleyard

Prestige markets will get stronger

Even though Omicron has created disruption to the economy over the past few weeks, Australia has fared significantly better than many other countries during the pandemic.

People want to live here and there will be lots of Aussie expats returning with money to spend.

The higher end of the market will benefit with more buyers fighting over a limited number of quality homes.

Expect the unexpected

I am cautious of two things that could impact the market.

First, a new Covid variant that forces the government to take measures such as lockdowns and restrictions or if the market gets too overheated and APRA intervenes. I can’t see APRA intervening, at least until the federal election is over.

Bookmark this article and let’s see how the market unfolds in a few months’ time.

The incredible price growth of 2021 won’t be repeated. Picture: Jane Dempster/The Australian

Tom Panos opened his own real estate office at 22. He has been immersed in the property industry for over 30 years and is considered one of the country’s leading real estate experts.