The year 2022 has come and gone, and with it, a whirlwind of activity within the Australian real estate market. Here’s a look back at some of the most significant events over the past 12 months. 

So what went down in our neck of the woods? Let’s take a closer look…

Australian property market outlook for 2022

Interest rate hike

To anyone who has been closely following the latest property news Australia, each monthly update on the cash rate hike by the Reserve Bank of Australia (RBA) must have been a cause of growing worry. To have that happen seven months in a row (at the time of this writing) really cast a gloom over this year’s property market outlook.

Everything was going swimmingly until May, which was when the cash rate hike started. Currently, the cash rate sits at 2.85% — a far cry from November’s rate last year which was at 0.1%. The jacked up cash rate certainly translated into higher mortgage rates, the effects of which rippled across the Australia real estate market. People had to grapple with increased monthly mortgage repayments (up by 40% in one year – the highest it has been since the 70s), and borrowing capacity for a majority of prospect first home buyers and investors have decreased.

Increased discretionary spending and inflation

Discretionary spending has definitely gone up. According to the latest data from the Australian Bureau of Statistics (ABS), household spending 28.0% through the year. This is in part due to the lifting of many Covid-19 restrictions that left people feeling like spending their money leisurely and on travels to see family and friends.

This year we are spending not what we are earning but what we have saved. This helped sparked the inflation, which in turn led to the current rate rise pain felt throughout the Australian housing market. The slump in consumer spending has already started as the biggest jump in interest rates in decades finally cut into household budgets.

Markets fall beneath million-dollar mark; not much changes in Brisbane

2022 opened with a surge in the number of million-dollar properties in the country — that is until the RBA started its consecutive and ongoing rate hikes, coupled with the rising inflation. As per the latest property market update in housing news Australia, the last six months has seen a significant drop in property value among those properties. 

Brisbane’s real estate market trend, which has been flat for a lot of years, has caught up to where it should be. In 2021 Brisbane was the strongest property market, but it started declining in value very rapidly since its peak in June — a 6.2% drop to date. However, it remains as Australia’s best-performing capital city in 2022 after 15 straight years of lean performance, and there is still a continued demand for real estate here.

Lots of refinancing

Another real estate market trend we saw this year is a spike in the number of refinancing homeowners. We have been receiving many calls and inquiries from people wanting to know if they are getting the right rate for their home loans, and we have helped many successfully refinance their mortgages and take advantage of the current rates before they go even higher.

There are lots of cashbacks from banks who are taking business off each other. One example is ANZ offering $4000 cashback for investors seeking to refinance their loans. Other banks are easing their lending terms too to encourage borrowing and perk up the property outlook for next year. 

Australian property market forecast for 2023

We project that the public will start feeling the real pinch next year when the buffer is exhausted after Christmas, school fees, and credit card dues. The start of 2023 would be a telling blow in terms of where the rates would end up. 

House price predictions point towards the direction of the Australian house prices going further down, and we think it will get back up by the middle or nearing the end of 2023. We see more people moving into Queensland and a bigger push for infrastructure and job creations as we approach the 2032 Olympics. 

Median hold periods are likely to increase as more recent buyers are discouraged to sell in a property downturn. The RBA cash rate might also continue its upward trajectory before cooling down halfway through the year. As always, it is difficult to give a house prices forecast — but hopefully things will get a little more stable next year.

The team at North Brisbane Home Loans is happy to help

The past year has been a big one for the Australian property market. Whether you’re a first-time buyer, an investor or just curious about what went down, we’ve got you covered. In fact, our client care specialist has helped save $200K in interest just in the last 2.5 months for people who sought to review their interest rates and opted to refinance!

We are closely looking at technology and trying to improve things for our clients and how they engage and deal with us. We are always happy to help you navigate these changes and assist you with your property needs, so don’t hesitate to get in touch with our mortgage brokers.

Patrick Cranshaw

Patrick Cranshaw, a Certified Mortgage Professional for over 21 years, founded North Brisbane Home Loans in 2002. His career began with ANZ Bank in New Zealand, where he progressed over 16 years to a Business Banking role in Virginia. After moving to Brisbane in 2000, Patrick led the QLD market for a home loan agency, helped set up the REMAX Real Estate Finance division, and practiced as a broker.