Without question, most property markets in 2021 were absolutely bonkers!
The constrained supply of for sale listings, alongside the huge numbers of buyers keen to transact, meant that there was heated (and many times overheated) competition for properties.
Some of the prices that people were paying were absurd and will likely wind up being a pain in their financial backsides in years to come.
However, we were still able to purchase properties for our clients that fit their investment briefs as well as their budgets because we’ve been doing so for years and years.
Alas, some buyers opted to work with industry newbies, who hadn’t even bought their own property let alone anyone else’s.
So, here we are, three months into 2022, and there is market change afoot in many locations… but not everywhere.
The sheer jump in prices in many (formerly) affordable suburbs in Sydney and Melbourne has meant that the volume of prospective buyers has fallen of late.
This is especially apparent in locations such as Penrith and Cranbourne, where buyers appear to be more sensitive to the interest rate conjecture that is currently being played out in the media.
Listings in these areas remain relatively tight, but we will see how that situation changes in coming months.
However, both of these areas can still offer great investment metrics, especially for investors, given rental vacancy rates are very low – which indicates markets well into undersupply territory.
This means that asking weekly rents have strengthened by about 12 per cent over the past year.
With fewer buyers on the ground in places like Penrith and Cranbourne, it’s clear that potential investors have more options than they did last year.
Strong conditions continuing
In the Moreton Bay region of Greater Brisbane, though, there is still a market frenzy under way.
Part of the reason why is the record low levels of properties coming to market. Indeed, it seems that the market boom from last year still has a way to go in this northern part of Greater Brisbane.
Take the Caboolture region, for example, where the total number of property listings is currently at its lowest for more than 12 years, which has sent house asking prices skyrocketing over 30 per cent in the past year.
That said, the median asking price for a house in Caboolture is currently around $586,000, which remains an affordable option for many homebuyers and investors, especially given the suburb’s rental vacancy rate is just 0.6 per cent as well.
As I’ve often said, there are always opportunities in every market cycle, with buyers in Penrith and Cranbourne currently benefiting from reduced buyer demand.
At the other end of the spectrum, homebuyers and investors keen on Moreton Bay, will likely have to pay market price to secure a holding, but all the signs are there that prices will keep firming for quite some time.