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Looking to the year ahead

Real estate & property news
22 January 2022
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The impressively strong performance of the local property market in the past year or so, despite the challenges of multiple lockdowns, property inspection restrictions and uncertainty about the economy, surprised a lot of people. So it’s not surprising that one of the most common questions we are being asked at the moment is what our expectations are of the market in the year ahead.

Will it continue to see price growth on the scale we saw last year? We doubt that’s likely. The combination of affordability constraints, the uncertainty that will inevitably come from the mud-slinging and scaremongering in lead up to the State and Federal elections this year, and the talk of an increase in interest rates are all likely to dampen people’s confidence a little. But we are still expecting to see growth in prices at a more sensible rate over the year.

You will notice we mentioned “talk of an increase in interest rates”, not an actual increase. That’s because we still feel it’s unlikely the Reserve Bank will begin pushing up rates until 2023 at the earliest, (although that won’t stop the media chat in the meantime)!

If you study the history of the Melbourne property market, you’ll know that the main drivers of growth in property prices are consumer confidence, economic growth, low-interest rates tied to the ready availability of credit, and a favourable ratio of supply and demand. The simple fact is that we are not expecting a negative trend in many (if any) of these factors in the coming year. Hence the likelihood of further price growth.

This expectation is further reinforced by one of the more accurate leading indicators of market activity, the data on housing finance approvals. These figures include those borrowers seeking finance approval prior to making offers, and they are still tracking at very high levels. This suggests that there are still a lot of buyers out there who are keen to purchase but haven’t yet managed to sign on the dotted line. So we are likely to experience strong ongoing demand from owner-occupiers and investors in 2022.

Of course, whilst overall trends in the market make interesting reading for those making new plans for the coming year, they don’t provide specific information on how much more your own individual property in the City of Frankston could be worth in the current climate. So if you’re interested in getting an accurate update, even if you just want to make sure that you aren’t underinsured, don’t hesitate to give one of the team at Barry Plant Frankston a call this week on 9781 3100.

Best wishes,

Barry Plant Real Estate

Frankston & Cranbourne

Real estate & property news
22 January 2022
Save Article

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