2021 has been another very challenging year for many and as we crawl to the finish line it’s worth taking stock and looking back at the year that was.
We’ve seen not only extraordinary results but, in many instances, unprecedented sales results as nationally dwelling values rose 22.2%, comprised of a 25.2% lift across regional markets and a 21.3% rise in combined capital city dwelling values
Strong housing activity was supported by a combination of factors, including low interest rates, fiscal and institutional support, accumulation of household savings and low levels of available stock. Housing transactions through the lockdown periods continued at a steady pace throughout the lockdowns in 2021 without as many disruptions compared to 2020.
All capital cities except for Melbourne also saw a strong uplift in growth rates to rents, increasing by 9.4% in the 12 months leading to November 2021 which is the highest rate of annual appreciation since 2008.
However, momentum has now declined, and the last few weeks have been challenging for some vendors, specifically those with unrealistic expectations as we see clearance rates pull back and trending down steadily as we see a spike in new listings which is currently outpacing the five year average.
Whilst it’s clear that the property market has passed its peak for 2021, we do anticipate that that the first quarter of 2022 will see another peak in demand with renewed momentum. However what lays ahead this will be highly dependent on whether we see increases in interest rates which will result in heightened uncertainty as the rapid rise in property prices has come with rapid expansion of housing debt.
The Year Of Change
Heightened activity in 2021 was not just a result of pent-up demand from lockdowns but it was also a year of reflection and changed property decisions compelling more households to make a move. It has been the year of change and consumer behaviour when searching for property highlights this in spades.
The below chart from Domain shines light on specific attributes or features prospective home buyers are looking for as the pandemic forced most of us to rethink and reprioritise where we spend more time, home!
Appraisals numbers are on the increase which would indicate that the level of new listings will also increase bringing further balance to the property market and more opportunities for buyers.
Population growth will also be front of mind for the Government to increase skilled migration. With job ads at its highest in 13 years, severe shortages in certain areas as a result of closed international as are international students, all of whom will require housing adding to further demand.
We predict that appetite for regional and coastal living will continue into 2022 as lifestyle choices but also as buyers seek more affordable options in areas close to major working hubs.
Melbourne dwelling values rose by 1.0 per cent in October with dwelling values increasing by 3.0 per cent in the quarter.
Property Management Update
As 2021 draws to a close, we reflect on a year of significant change in the Property Management industry in Victoria. Over and above the challenges we all experienced in many ways during the extended COVID-19 related lockdowns in Victoria, our property management team also pivoted swiftly to ensure legislation and minimum standards pertaining to the new renting laws were implemented in a positive and professional manner for our clients.
Our trades and contractors continued to support our efforts during the year, during and after business hours, to ensure that property maintenance was actioned in an efficient manner, to a high standard and at reasonable rates. We extend our sincere thanks and best wishes for their incredible service.
On a personal note, I would like to take the opportunity to publicly thank my colleagues – our outstanding team of property professionals – for their commitment to always delivering exceptional service to our valued clients. A positive attitude and a great work ethic, together with your support and unwavering team spirit is greatly appreciated.
On behalf of the property management team – myself, Liz, Rach W and Melissa – we wish you, our valued clients, a safe, happy and relaxing festive season. Enjoy a very well-earned break and we look forward to picking up where we left off upon our return to the office on Monday, January 10.
As the year comes to an end, we would like to wish everyone a merry Christmas and a safe New Year!
We will close on December 22nd at 2pm for the festive season and will reopen on January 10th at 9am.
While our office is closed, we do have people to assist you during this time. If you have a Buyer’s Advocate or Property Management enquiry, please call our office on 03 9818 4499 and you will be directed to the correct person for your call.