A combination of low-interest rates, equity-rich owner-occupiers and the prospect of excellent rental yields from houses will ensure Australian real estate prices enjoy another bumper year in 2022.
“With Australian property prices rising by over 22% in 2021, the fastest rate of annual growth in more than 30 years, Australians have plenty of equity in their homes and are looking to improve their wealth,” said Tina Ashton, National Head of Growth & Network Manager, Raine & Horne Group.
“With Australian shares rising by a relatively softer 14.5% in 2021. Moreover, the prospect of more volatility in the wake of Omicron breakout set to impact global equity markets, Australians are sitting at home or on the beach this summer wondering how to improve their wealth, and it seems all roads lead to real estate.”
Nationally, Tina predicts housing markets in southeast Queensland are set for a robust 2022. “We’ve seen a significant uptick in enquiry for houses in areas such as Logan City, Moreton Bay and Ipswich. Compared to the capital city markets, these markets offer affordability and yields closer to 4%. To support the argument that southeast Queensland is the flavour of the month, investor enquiries are up by 350% in the Logan/Beaudesert region compared to the start of the year and by around 200% for Moreton Bay and Ipswich.
“In NSW, a surge in rental yields from housing investments in the Southern Highlands, Lake Macquarie, Newcastle, Central Coast, the Shoalhaven and the Mid North Coast that enjoyed good growth in 2021 and we expect rental values to increase by more than 10% again in 2022.
Other housing markets around Australia set for rental growth in 2022 include Mandurah in southwest WA where research from realestate.com.au predicts rental growth of 13% this year.
Tina also believes that reopening borders to international students should help kickstart capital city apartment markets after a late-year lull in 2021. For example, there were instances of apartments in Sydney’s inner west sitting vacant for the last couple of months in 2021. “Already in early 2022, some of these apartments have had large numbers of groups through with landlords now sifting through applications for the first time in months,” Tina said. “This is an excellent sign for inner-city apartment and housing markets in Sydney and Melbourne.”
To support this argument, research from realestate.com.au predicts that houses in the popular inner Melbourne suburb of Fitzroy will enjoy decent rental growth of more the 10% this year.
With agents in all capital cities and Australia’s most prominent regional hubs, Raine & Horne is well placed to provide you with the latest data on property values, rental yields, and weekly rents. Call us today for an obligation free discussion.