What is next for homebuyers this 2022?
Posted by Tristan Angelini on 10 January 2022
Many Australians have made it a point to include in their new year’s resolution to buy property. They have set their sights on that huge leap and enter the market by making such a huge investment. As part of the market, we agree that property is a lucrative investment provided that you are equipped with at least the basic principles as well as the capacity to discern the right actions from what could be detrimental to your business.
According to experts, it looks like it would be difficult for first home buyers to get into the property market this 2022, but there is some glimmer of hope as more homes are expected to hit the market, which would allow more buyers to have more options with less competition. There’s a possibility of interest rate rises that could put pressure on the unprecedented price growth. Plus, there’s the possibility of growth wages in a tight jobs market. However, it’s not going to be instant.
Experts are saying that at the moment, first home buyers will have to look at national property prices that are 2.2 percent higher than what was recorded in 2021 on CoreLogic data. This along with tighter lending requirements imposed by banks after changes have been made by the banking regulator would definitely make an apparent effect on those who are planning to buy their first home.
Experts also predict that it would be a little bit tougher because of the increase in the average level of prices, which would be seen as higher than this year’s. It looks like affordability will remain an issue.
By the end of 2021, several factors had an impact on the property market. One of which was when the government incentives that were in place in 2020 were wound back. Remember that so many Australians benefitted from these incentives, especially those who bought their very first homes in the midst of the pandemic. These incentives were able to save them a lot of money, which made it very successful.
Another factor is the increase in interest rates and a slight easing of clearance rates. There’s also the matter with the ever-changing priorities of homebuyers. These days, potential buyers have a lot to consider. Mostly they prioritize things have control over, for instance, they choose properties that go under 10 percent annualized growth. With the lowest unemployment rates across all states, growth in wages should be seen very soon.
Right now, what seems to be the number one reason that many potential first home buyers will find difficulty going this route is the fact that banks are tightening their home loan requirements. According to experts, high levels of borrowing are becoming an issue. Changes in the lending landscape could definitely impact buying activities in the future. Banks are still honoring pre-approvals according to financial experts, but once the pre-approval expires, it would affect the maximum they could borrow from banks.
The future still looks hopeful, but it is important to understand the current standing and atmosphere of the market. Otherwise, things will only get more complicated.