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There is no doubt the Australian property market has been a hot topic in 2021, with properties in every state rising to record-breaking prices. Where to from here? Will house prices drop due to lack of housing affordability? Will historically low-interest rates keep prices rising even further? What will be most in demand with buyers? In this article, we share some insights into the most likely trends for the Australian property market in the financial year 2022.
Trend Prediction 1: A Rise in Coastal and Regional Living
Location, location, location! The increase in working from home caused by the pandemic has seen a dramatic increase in house prices in regional areas, as buyers prioritise a more relaxed coastal or country lifestyle over a city commute. Take Byron in northern NSW and Kiama in south coast NSW for example, where the median house price has broken the million-dollar mark for the first time ever.
Properties in regional and semi-rural areas, such as Maitland, Lake Macquarie, Goulburn and some parts of the Blue Mountains in NSW, also tend to include bigger blocks of land at affordable prices. This allows buyers to either extend and renovate the existing home to suit their family’s needs, or even use the extra space to build a Granny Flat as a home office or to accommodate family.
Trend Prediction 2: Increasing Demand for Homes with Granny Flats
Another impact of the pandemic has been increased conversations in how to protect the elderly and most vulnerable people in the community. This has seen Granny Flats become a preferred alternative to aged care and nursing homes, which are becoming increasingly overcrowded and expensive. With Australia’s ageing population, this trend of families opting to build Granny Flats on their property to supervise elderly parents is likely to continue in the future.
Homes with Granny Flats are on the rise, not only to build but also to sell and buy. Real estate agents are persistently on the lookout for properties with Granny Flats that they can sell quickly to their investor contacts. Recent data from the Australian Bureau of Statistics reveals the value of national investor lending increased by 12.7 per cent over the month of March to reach $7.8 billion, the highest monthly total since August 2017 - which had similarly strong market conditions and high consumer confidence. Investors are particularly interested in purchasing properties with a Granny Flat because it allows them to increase the amount of rental revenue generated from both dwellings, but also lowers the risk of vacant periods by distributing the tenancy over multiple leases.
If investing in a property with an existing house on land over 550m2, building an additional Granny Flat can increase the property’s value by as much as 30 per cent according to CoreLogic data. For these reasons, building a Granny Flat on land in regional areas is a savvy financial manoeuvre for ambitious young investors wanting to take advantage of the record-low mortgage rates and enter the Australian property market in financial year 2022. For more information, read our article Why a Granny Flat is Savvy Investing for Millennials.
Trend Prediction 3: Increased Digitisation
The COVID-19 pandemic saw a spike in online activity, with many people realising the convenience of digital communication. In terms of property markets, virtual tours will continue to increase in popularity, while digital technology integrated into the home will be considered favourable by buyers – such as Wi-Fi connectivity and Smart Home Technology.
This trend also applies to the building process, such as the launch of the NSW government’s e-planning portal - which now links building development applicants such as homeowners with local councils, private certifiers, town planners, and 32 different statutory and regulatory agencies into one single digitised workflow. Including real-time notifications, electronic payments, and digital signature functionality, this platform will be used by all NSW councils from 1st July 2021. Being traditionally a paper-based and manual process, the government is hopeful this new digital platform will make the development applications process 20 days faster than the usual 60-70 day process.
It is predicted this digital trend will increase in 2022, with Customer Service Minister Victor Dominello already pushing for the planning portal to be extended across other property services such as strata construction and conveyancing.
Did you know that Cubitt’s manages the building application process for you? We are passionate about providing our customers with a stress-free building journey. Our experienced drafting and council planning teams understand the complexities of building with local councils throughout NSW and the ACT, while a dedicated point of contact will keep you updated throughout the process. This is just one of the many benefits offered by The Cubitt’s Advantage.
Trend Prediction 4: All About Lifestyle
With more people working from home, and with overseas travel still unlikely for the foreseeable future, buyers are increasingly looking to purchase homes that offer an ideal lifestyle and optimum ‘at home’ living. This means properties with open plan living spaces and dining areas flowing on to family-friendly kitchens will most likely be in high demand, particularly if the property has luxuries such as a butler’s pantry, walk-in wardrobes or floor-to-ceiling windows. In a similar vein, nature-based living has risen since COVID lockdowns, so we expect to see a rise in popularity for homes that promote indoor/outdoor living, with features such as extended outdoor decking areas, outdoor ceiling fans, and rear bi-fold doors.
To gain this lifestyle at home, we anticipate many homeowners will take advantage of low-interest rates to extend or renovate their property.
Trend Prediction 5: Continued Low-Interest Rates
The historically low-interest rates that have propelled dwelling prices will likely continue in the near future. Recent reports state that the Reserve Bank expects a fast economic recovery from the pandemic, with the economy growing faster than initially expected by the end of the year – putting pressure on the federal government to help lower the unemployment rate. Despite this optimistic outlook, RBA governor Philip Lowe stated it was unlikely unemployment would be low enough to lift wages and inflation to a level requiring an increase in official interest rates until 2024.
If the interest rate does rise again in the financial year 2022, it is most likely to be in small increments.
Armed with these predictions, what will your next financial move be in the property market for the financial year 2022? If you are thinking of a home extension or to build a Granny Flat on your property, speak to the experts at Cubitt’s. With over 25 years of experience building throughout NSW and the ACT, we offer a streamlined and stress-free approach to building your dream project.
Our longevity and deep understanding of the industry has allowed us to proactively source the best building materials at affordable prices from world-class suppliers and leading brands such as COLORBOND®, Weathertex, Caesarstone and more. We also employ the most thorough, friendly and reliable tradesmen in the industry, ensuring quality craftsmanship is delivered for our customers – on time and within budget.
Choose a trusted builder with no hidden fees for your next building project. Browse our wide range of Granny Flat designs call Cubitt’s award-winning customer service team on 1300 721 150.
Cubitt's is staffed by a professional team of draftsmen and builders with years of experience. Ask us about the Cubitt's Advantage today.