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Thursday 25 November 2021
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Boom and Bust 2022 Report

Australian Housing Market to Peak in 2022

Christopher’s Housing Boom and Bust Report 2022 is OUT NOW!

Australian capital city dwelling prices will peak in the first half of 2022, with growth slowing down sharply due to expected further intervention by the banking regulator to restrict home lending, according to Christopher’s Housing Boom and Bust Report 2022, released today by SQM Research.
SQM Research’s base case forecast is for property prices to rapidly slow from the current annual 20%-plus growth rates. The research house expects a slower rate of price rises over the first quarter of the year, followed by price falls as early as mid-2022. The price falls will be led by Sydney and Melbourne houses, for which SQM Research is currently recording significant overvaluation. These cities are the most sensitive to even minor intervention by the banking regulator, the Australian Prudential Regulatory Authority (APRA) in home lending.

Christopher’s Housing Boom and Bust Report 2022
Capital City Dwelling Price Change Forecasts

Source: Christopher’s Housing Boom and Bust Report 2022

In both Sydney and Melbourne, 2022 should see a turnaround in the unit rental markets and unit price growth could outperform that of houses. With houses being overvalued, apartments are relatively affordable and are expected to be in greater demand from an expected rise in net migration from interstate and overseas with Australia’s border now open.
Louis Christopher, Managing Director of SQM Research said: “As 2021 draws to a close, the national housing market is starting to show signs of a peak. Auction clearance rates have fallen from their highs amid record listings. However, we may also be recording some seasonality and pent-up selling after vendors held off listings during the lockdown. Nevertheless, we expect the market to peak in 2022, with further expected intervention by APRA, which could come as early as next month, halting the price momentum.

“If the Australian housing market does not slowdown by mid-2022, APRA will likely keep intervening in home lending until the market does slowdown. We cannot afford another year of 20%-plus gains across the national housing market. And so, to ensure a soft landing for the market, it is best we see additional intervention sooner rather than later to reign in property valuations.”
Other forecasts from Christopher’s Housing Boom and Bust Report include:

  • Dwelling prices in regional Australia to correct, particularly for inland communities, as people return to the capital cities.
  • Official interest rates are likely to stay on hold until at least late 2022.
  • Further APRA intervention to occur as early as December 2021.
  • Expected dwelling price corrections to be moderate unless exacerbated by aggressive monetary policy action involving rate rises earlier in the year.
  • Ongoing rental rises for capital cities over and above the CPI change.   

Christopher’s Housing Boom and Bust Report also has a full breakdown of every postcode in the country covering current market statistics and its postcode investor ratings. Click here to purchase your report for $59.95.

About SQM Research

SQM Research Pty Ltd is a respected Australian investment research house, specialising in providing research and data across all major asset classes.
Enquiries: Louis Christopher  +61 2 9220 4603

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