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Property Investment Trends in 2022

24 Dec, 2021

Property Investment Trends in 2022

The exciting arrival of a new year brings a whole new scene of opportunities.

A lot of things have happened in the 2021 property market – changes were forged and new strategies are crafted at the same time in response. Over the past year, Sydney house prices have risen over 22%, turning it into a red hot market for all buyers and property investors.

It is a savvy move to monitor the investment trends that are going to happen in the real estate industry following the new year period.

In this article, we’ve wrapped the current market insights on how the Sydney property market performed in 2021. Then, we looked at property experts’ predictions on what’s ahead for the Australian property market in 2022, with new investment trends that are predicted to happen for the new year.

2021 wrapped: Sydney property market in 2021

To recap the year 2021, CoreLogic’s Head of Research Eliza Owen said in their latest year-end report that the estimated value of Australia’s residential real estate had risen from $7.2 trillion at the end of November 2020 to a record high of $9.4 trillion in just 12 months.

Furthermore, sales volumes increased to an estimated 614,635 in 2021, the highest level in nearly 18 years, while national dwelling values increased 22.2% in the year to November, the highest increase since 1989.

“Strong property markets’ performance over the year was driven by multiple factors, including low interest rates, fiscal and institutional support for households, high household savings and relatively low levels of advertised stock,” said Eliza Owen.

Properties market turned it into a red hot market for all buyers and investors in 2021

According to Domain’s house price report, property’s increased in value around $6,700 a week over 2021. Sydney experienced the fastest annual rate of price growth on record, with a median house price of $1.5 million, and apartments exceeding the record rate of $800,000.

However, Australia’s residential property market is now entering a period of slower growth, following a stellar performance throughout 2021.

According to a Realestate.com.au PropTrack report, with a significant rise in the number of new properties entering the market in the last few months of 2021, “some of the heat is starting to come out of the market”.

What’s ahead for the Australian property market in 2022?

Following a boom period in 2021, when house prices rose by an extraordinary 22% in a single year, many experts predict that prices will begin to moderate the next year.

Homes selling in record time but demand is starting to ease

  • ANZ economists forecast national property prices to rise a healthy 6% in 2022.
  • NAB forecasts a 5% increase in property prices in 2022, but the performance of the market will vary by location.
  • Westpac recently forecasts property prices to rise by 8% in 2022, with the majority of that growth occurring in the first half of the year.
  • Commonwealth Bank predicts a 6% increase for the next year.

While providing an outlook for the 2022 market, Ms Owen, CoreLogic’s Head of Research noted that sales and listing activity is likely to peak.

“The constraints of slightly tighter credit conditions, the erosion of housing affordability and a higher level of listings being added to the market are expected to see softer growth rates across property values in 2022,” she said.

“These forces are an accumulation of headwinds for property market performance. Softer growth rates are likely to coincide with fewer purchases, where sales and listings activity eventually move with momentum in price.”

Property investment trends in 2022

Looking ahead, here are some of the most impactful property investment trends that are expected to happen in the new year.

#1 Unit demand is expected to increase

One of the most significant effects of Covid has been the decentralisation of inner-city tenants and apartment owners, which has resulted in high vacancy rates and lower rents in the inner-city apartment market over the last 12 to 18 months.

However, as international borders open up for non-residents, investors will start looking for investment properties again and units will enjoy more growth potential, according to Westpac.

Units are expected to generate more rental income in 2022

CoreLogic head of research Tim Lawless expresses the same opinion where he said buyers are seeing greater value in units as a property investment due to house price affordability constraints.

“Both the lower entry point and higher yield profile may be an attractive option for investors as they become more active in the housing market,” Lawless says.

#2 The rise of Studio and One-bedroom Apartments

According to the latest news from Realestate.com.au, the market for single-room attached dwellings is bouncing back, offering renters an affordable option while providing investors with a high rental yield. There was an 8% year-on-year increase in the number of views for one-bedroom listings in 2021 for Sydney and a whooping 82% surge in views for Canberra.

This is due to the returning of skilled migrants and international students back to the rental market, who are looking for a small, affordable apartment with easy access to public transport, convenience and amenities.

The studio apartment property market is forecasted to grow strongly in the beginning of 2022.

Domain’s chief of research and economics, Nicola Powell, says apartments that are close to the CBD markets will recover the fastest, with strong rental demand returning once overseas migration goes back to normal.

#3 Favouring properties with good connection

According to the Realestate.com.au PropTrack report, since the Covid-19 pandemic began, a record number of Australians have moved away from the crowded capital cities, with a rush to sea change and tree change destinations.

This drove prices upwards in many of the key lifestyle hotspots like the Northern Beaches or the South Coast. House prices in coastal towns like Kiama also surged to keep up with demand as a result of the rising number of Sydneysiders to regional areas.

Properties with good location are attracting more property investor

According to CoreLogic, the popularity of regional Australia is reflected in many aspects of their Best of the Best report for 2021. The beginning of 2022 may be marked by a surge in demand for regional lifestyle markets, similar to the surge which followed the 2020 lockdowns.

#4 Investment properties outside of Sydney

The high cost of living in certain suburban areas has driven the demand of large cities that haven’t experienced a dramatic boom in the real estate market yet.

A lot of investors predict that the demand for Canberra and Brisbane will grow following the footsteps of cities such as Sydney and Melbourne.

Canberra has fostered a steady ​​23% capital growth, a low vacancy rate of 0.8% and a record high gross rental yield 5.8%, according to SQM Research.

Domain suggests that investors are likely to feel more comfortable about buying properties outside Sydney and Melbourne in the upcoming year as they take a post-pandemic look at their lifestyles, and feel happier living or investing out of inner cities or in regional and coastal locations.

 Investors predict that the demand for Canberra and regional areas will grow

#5 “Bugging Out” trend – Demand for Safe Houses

The pandemic and ‘unprecedented events’ have been one of the key themes of our lives this year. More investors have invested in property that is available for them to use as a safe house when the time calls for it.

According to Domain, the demand of having a “bug-out” place – somewhere to retreat to in the case of emergencies, like COVID lockdowns – are going to be high in most property investors’ bucket lists over the next year.

“People are buying investments, and then choosing to live there for two to three months – perhaps in a more conducive environment than their own homes that are closer to their work – as a “workstation”, and then rent them out the rest of the year,” Kevin Brogan from Herron Todd White said.

Investors living in their property before renting it out

#6 The influences of the interest rates and regulators

Real estate markets are opening up after the lockdowns the pandemic caused are coming to an end across the country. However, The Reserve Bank of Australia has announced that the official interest rate will remain at the same level of 0.10% for the 13th consecutive month.

While there were some predictions that RBA will raise that cash rate from the rock-bottom rate of 0.10% in Q3 2022, many now expect it will be delayed until 2023 or perhaps 2024.

The low-interest rates create an amazing opportunity for people to put their money into an investment property. Therefore, while the RBA holds rates, 2022 will be an ideal time to buy a property. 

The Reserve Bank of Australia

So what are the best suburbs to look for an investment property in Sydney in 2022?

With Australia’s international border reopening in full swing in 2022 and rental demand are expected to rise, apartments with good CBD connections and in regional areas will become new highlight locations.

If you are considering dipping your foot into the investment property market, here are some potential investment targets to keep an eye on in 2022.

St George Region – NSW

 St George Region presents an astute long-term investment

Located in Sydney’s southern suburbs – around 20 minutes from the Sydney CBD, St George Region strikes the balance between Convenience, Connectivity and Community. Emerged as a cosmopolitan hub of colour and vibrancy, St George Region presents an astute long-term investment.

  • Effortless connection and convenience to all reaches of Sydney – 20 minutes to Sydney CBD and 35 minutes to Parramatta 2nd CBD
  • Proximity to employment, education and entertainment hubs
  • Infrastructure for long term growth
  • Population growth of nearly 30% over 12 years*

Western Sydney – NSW

Sydney’s West is undergoing an exciting transformation

Sydney’s West is undergoing an exciting transformation, complementing a substantial government investment in transport and urban regeneration.

With improved connectivity, jobs for the future, plus new skills and education opportunities, Western Sydney is the new region to look at!

Canberra

Canberra housing market is ideal for real estate investment

Fuelled by a strong local economy, positive affordability, and relatively high investment returns, the Canberra housing market is one of Australia’s most exciting destinations for property investors.

  • Nation-leading performance for unit rental yield growth over 2021
  • Population growth well above the national average – at 1.5%*
  • Overall rental vacancy rate of 0.8% –  the lowest in Australia*
  • Strong employment growth – expected to increase by one-third over the next 25 years

Want to build your property portfolio in 2022? Ask St Trinity.

At the end of the day, before making any investment decisions, investors need to look at different metrics such as rental yields, annual growth, and vacancy rates. There are also broader economic factors to consider, such as the likelihood of interest rates rising and financial conditions imposed by government regulators and institutions.

At St Trinity, we understand that the ins and outs of properties in the future year can be complicated for new investors. So when it comes to property investment and choosing the right property, we can provide you with professional advice.

Our professional team at St Trinity is keen to answer all your questions. Call us at (02) 9099 3412 or register your interest below.

* The figures are provided by CoreLogic, Domain.com.au, Realestate.com.au, SQMResearch and MyHousingMarketReport.

AUSTRALIA PRIVACY STATEMENT

Last updated: August 2020

INTRODUCTION

St Trinity Property Group and its affiliated entities, representatives, agents and related companies (collectively referred to as ST TRINITY PROPERTY GROUP) respect the privacy and security of your Personal Information, as defined below, and comply with the requirements of the Australian Privacy Principles under the Privacy Act 1988 (Cth).

This Privacy Policy explains in general terms how St Trinity Property Group handles your Personal Information. However, it does not apply to St Trinity Property Group’s employee records to the extent they are handled by any of our companies that is or was the employer of that employee in relation to the employee’s current or former employment. Such employee records are generally exempt from the Act and will be dealt with as permitted by law.

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WHAT PERSONAL INFORMATION DO WE COLLECT AND HOLD?

Under the Act Personal Information is defined as information or an opinion about an identified individual, or an individual that is reasonably identifiable, in whatever form and regardless of whether it is true or not (Personal Information). The Act also defines a subset of Personal Information as sensitive information (for example health records, racial or ethnic origin, religious beliefs, criminal records).

The types of Personal Information we collect and hold will depend on the circumstances of collection and on the type of service we are providing. For example, when we are engaged to sell a property, we may collect and hold Personal Information from both the seller and potential buyers such as name, address, email address, telephone numbers, employment details and details about their business.

We may also collect and hold certain sensitive information that is reasonably necessary for the provision of our services, including health and criminal records. If you provide us with any sensitive information, you consent to us collecting that information and handling it in accordance with this Privacy Policy.

HOW WE COLLECT PERSONAL INFORMATION

We may collect Personal Information about you directly when you deal with us over the telephone, send us correspondence (whether by letter, fax or email), have contact with us in person, visit our websites or complete hard copy or online forms.

There are also circumstances where we may collect Personal Information about you from someone else. For example, from:
• Market research companies contracted by us to obtain information so that we may improve and market our services;
• Your employer;
• Other agents and valuers who may be involved in the services we provide;
• Property developers who contract us to market properties;
• Publicly available information and databases;
• Any of the companies within the St Trinity Property Group (both local and overseas);
• and Anyone you have authorised to deal with us on your behalf.

We also automatically collect certain information when you visit our websites or our subscribers receive promotional emails from us via cookies and other tracking technology (such as web beacons), some of which may be capable of personally identifying you. Such information includes the type of browser and operating system you are using, your IP address and how you use our websites.
Depending on the type of service you or our customers have requested, we may also seek to collect information about someone else from you (for example, contact details of your solicitor, emergency contact person or tenant). However, you must not provide us with Personal Information about another person unless you have clear consent from that person to do so, told them that their Personal Information will be handled in accordance with this Privacy Policy and directed them to where they can find it.
Regardless of how it is collected, we handle Personal Information in accordance with this Privacy Policy.

WHY WE COLLECT, HOLD AND USE PERSONAL INFORMATION

We generally collect, hold and use your Personal Information for the purposes for which it is provided to us (which will usually be obvious at the time of collection), related purposes or as permitted or required by law. Such purposes may include:
• Acting as agent for vendors or purchasers in relation to the sale of a property;
• Acting as agent for owners or tenants in relation to the leasing and or valuation of a property;
• Project management services;
• Structured advisory services;
• Town planning services;
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• Administration of our business, such as collection of overdue commissions or outstanding fees;
• Responding to client enquiries and communicating with you from time to time to maintain contact and keep you updated on the services you have requested;
• Forecasting future needs of our services and general quality assurance and training purposes;
• Engaging in legal proceedings and/or enforcing judgments and/or orders;
• Complying with the applicable legal or regulatory requirements and/or orders of competent authorities;
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We generally use information automatically collected by cookies and other tracking technology to identify you as a valid user, ensure that no one else can sign on simultaneously with your account from another computer and help us serve you better based on your registration preferences. We may also use cookies to help us facilitate any promotions or surveys that we provide. Third parties whose products or services are accessible on our websites may also use cookies, and we advise you to check their privacy policies for information about their cookies and other privacy practices.

DISCLOSURE OF PERSONAL INFORMATION

We may disclose your Personal Information to third parties as may be necessary for any of the purposes stated in the above section. Such third parties generally include:
Our third party providers, contractors, consultants, agents and/or representatives (such as law firms, banks, financial institutions, insurers, IT providers, mortgage referral services providers and/or wealth management services providers) who provide services to us or on our behalf, including to:
• Conduct valuations;
• Assist with obtaining payment from creditors;
• Operate data centres;
• Conduct market research;
• Provide advice;
• Potential buyers, tenants, conjunctional real estate agents and brokers for the purpose for which the information was collected or for related purposes (for example to complete a transaction on your behalf or provide you with a service that you requested); Anyone you have authorised to deal with us on your behalf;
• Any of the companies within the St Trinity Property Group and their related companies; Government authorities, regulatory bodies, law enforcement agencies, courts, tribunals and/or parties to the legal proceedings where you have consented to this or we are required or authorised to do so by law;
• Debt collection agencies; and/or Any other third parties identified at the time of collection of your Personal Information.

DISCLOSURE OF PERSONAL INFORMATION OVERSEAS

Some of the third parties listed above to whom we may disclose your Personal Information are located overseas. For example:
Our information technology and business process service providers that are located in countries including (but not limited to) the Indonesia, India and Philippines; and Our overseas clients that are located in the same countries as the companies within the St Trinity Property Group.
Our contracts with these parties generally include an obligation for them to comply with Australian privacy law and this Privacy Policy.
However you acknowledge that, by agreeing to the disclosure of your Personal Information to these entities outside of Australia, we will no longer be required to take reasonable steps to ensure the overseas recipient’s compliance with the Australian privacy law in relation to your Personal Information and we will not be liable to you for any breach of the Australian privacy law by these overseas recipients. On this basis, you consent to such disclosure.

ACCESS, UPDATE AND CORRECTION OF PERSONAL INFORMATION

We take reasonable steps to ensure that the Personal Information we hold about you is accurate, complete and up-to-date. However, we also rely on you to advise us of any changes to your Personal Information. If you are able to access your Personal Information by logging on to an account you have with us, it is your responsibility to ensure your information is accurate, complete, relevant and up-to-date.
On request we will provide you with access to the Personal Information we hold about you, including for the purpose of correcting or updating that information, unless otherwise required or permitted by law.
There is no charge for making the request or giving the access to your Personal Information. We will deal with your request within a reasonable period after the request is made.
If we refuse to provide you with access we will provide you with a written notice that, at a minimum, outlines reasons for the refusal and the complaints mechanisms available to you.
If you wish to access the Personal Information we hold about you or to update or correct it, you can either do so by logging on to your account (if you have one) or contact us using the contact details provided below. We will require you to verify your identity and specify what information you require.

SECURITY OF PERSONAL INFORMATION

We take reasonable steps to protect any Personal Information that we hold from misuse, interference and loss and from unauthorised access, alteration and disclosure. For example, we implement IT security procedures including password protection, firewalls and site monitoring and we store your Personal Information on a secure server.we store your Personal Information on a secure server.
However, data protection measures are never completely secure and, despite the measures we have put in place, we cannot guarantee the security of your Personal Information. You must take care to protect your Personal Information (for example, by protecting any usernames and passwords). You should notify us as soon as possible if you become aware of any security breaches.

DIRECT MARKETING

When you register as a member on our websites, you will be given a choice as to whether you want to receive e-mail messages from us, including newsletters, announcements and e-mail communications about our latest news, products or services. To the extent the relevant local law requires us to seek your consent, we will only send such messages to you if you opt-in. If you do not wish to receive direct marketing calls or materials, you may use the unsubscribe facility in the marketing communication or contact our Chief Privacy Officer using the channels prescribed below. Further, as a registered member with us, you can modify your choice at any time by accessing your registered account with us. We will stop using your Personal Information for direct marketing if you so request.

PRIVACY ON OUR WEBSITES

Our websites may contain links to the websites of other entities. If you click on such links, you will be transferred to the websites of these entities. We have no control over, and are not responsible for, the privacy practices of these entities. You should read the privacy policy of these entities to find out how they handle your Personal Information when you visit their websites.

WHAT IF YOU HAVE A COMPLAINT?

If you wish to make a complaint about a breach of this Privacy Policy or the Australian Privacy Principles of the Act you can contact us using the contact details below. You will need to provide us with sufficient details regarding your complaint together with any supporting evidence. Our Chief Privacy Officer will investigate the issue and determine the steps that we will undertake to resolve your complaint. We will contact you if we require any additional information from you and will notify you in writing of the outcome of the investigation. If you are not satisfied with our determination, you can contact us to discuss your concerns or contact the Australian Privacy Commissioner via www.oaic.gov.au.

PRIVACY & SITE CHANGES

St Trinity Property Group may update this Privacy Policy from time to time so please review it periodically for changes. If the changes are significant or substantive, they will either be advised to you in writing or posted on our websites at www.sttrinity.com.au. Your continued use of our websites or services, requesting our assistance or the provision of further Personal Information to us (directly or via an authorised person) after this Privacy Policy has been revised, indicates your acceptance of the revised Privacy Policy.

OUR CONTACT DETAILS

If you have a query relating to this Privacy Policy or wish to make a complaint, please contact us using the following contact details:
• St Trinity Property Group
• Chief Privacy Officer

• PO Box 1235
• Menai NSW 2234
[email protected]

MORE INFORMATION

For more information about the Privacy Act in Australia and protecting your privacy, visit the (external link) website below:
oaic.gov.au