Where to Now for Australia’s Rising Property Market?

Property on desk with keys

Where to Now for Australia’s Rising Property Market?

The value of Australian housing grew by 1% in December 2021, bringing the total increase of housing prices to 22.1% for 2021. While December 2021 demonstrated a steady increase in values, it is important to note that the pace of growth itself is gradually softening, with values down from 1.3% in November 2021, and 2.8% in March of the same year.

National Lending Manager of WLTH, Chad Hoy Poy, says that the Australian pandemic housing boom has come to an end, with prices set to peak in 2022, followed by a drop as borrowing costs rise. However, Poy believes that it’s unlikely that property prices will fall anywhere near pre-pandemic levels.

Capital City Housing Market Performance

Throughout the 2021 calendar year, property prices were up 21% across the combined capital cities, with regional areas experiencing a staggering 25.9% increase.


Here in Melbourne, our first month-on-month fall in values since October 2020 was recorded, as our growth dropped by 0.1% in December 2021. The overall annual price increase throughout the city sat at 15.1%. The Australian housing market has been booming for decades and the onslaught of the pandemic saw things shift in interesting directions. As industries collapsed and the jobs market wobbled, the value of Australian properties still grew by a staggering 22.1% in 2021!

A shortage of listings has been a feature of the housing market throughout the pandemic, favouring sellers and pushing prices up, while the trend towards remote work has seen rural and regional markets stronger than ever. But recent data saw the pace of growth in capital cities soften in December, with Melbourne recording its first month-on-month fall in values since October 2020. Managing Director of BlueRock Finance, Jamie King, states that inflation has spiked to 3.5% as at 31 December 2021 – smashing expectations and is years ahead of RBA forecast. The result of this could see a quicker and sharper than expected rise in interest rates.

So what does 2022 look like for Australia’s property market? And what does this mean for home owners and investors?


Adelaide experienced the second-highest monthly growth rate of 2.6%. The median house price in Adelaide now sits at $569,992 – a result 23.2% higher than it was in December of 2020.


Strong performance continued across Brisbane, with values increasing by 2.9% in December – the highest rate of growth across all of Australia’s capital cities. Brisbane saw values rise the most in 2021, with housing values increasing by 27.4% throughout the year. The increase produced a median housing price of $683,552.

Regional areas throughout Queensland also saw growth rates hitting new heights in December 2021, with the Sunshine Coast housing market closing the year with a 33.7% increase.


Canberra ended 2021 with housing prices up 24.9% higher than they were in 2020, with the median housing price sitting at $894,338.


Darwin recorded an increase in growth of 0.6% in December 2021, with the median housing price also increasing to just under $499,000.


Hobart experienced the largest increase in prices over the course of the year, and ended 2021 with prices up 28.1% from 2020. The median house price value in Hobart increased to $694,261.

Regional areas of Tasmania also experienced growth, with prices increasing by 29.5% over the span of the year.


The price of property in Sydney rose by 0.3% in December 2021, with the city closing out 2021 with prices 25.3% higher than the year prior, and seeing their median property price rise to just under $1.1 million.


Across in Perth, housing values increased by 0.4% in December, with housing prices up 13.1% higher than 2020.

It has been suggested that the slower growth conditions across the Perth housing market can be attributed to the disruption to interstate migration as a result of the countless lockdowns experienced across Australia.

Shortage of Listings Still Produced Record-Breaking Property Sales Throughout 2021

As a result of the pandemic, working from home schedules, and job insecurity, 2021 saw a continued shortage of property listings. The amount of properties advertised throughout the year were 24.7% lower than the existing five year average, with regional advertised stock levels finishing 35.9% below the five year average.

However, in the final quarter of 2021, the total number of property listings finally began to rise. The number of new listings that were added to the Australian housing market throughout December 2021 was 21.4% above the previous five year average. The exponential growth in listings demonstrates quick selling times, stronger vendor confidence, and higher auction clearance rates.

Property Trends to Expect in 2022

As restrictions continue to ease throughout the nation, one trend that we can expect to see in 2022 is people moving into suburbs closer to the city, as a result of many employees moving back to working from their office locations. We can also expect to see the following changes:

Reduced Approval Times

In an attempt to support the continued growth of the property market, and the existing quick-sale turnaround times, there will be a heightened focus on reduced approval times for banks in 2022.

Banks to Streamline Their Processes

In response to the big four banks streamlining many of their processes throughout 2021, in 2022, we can expect to see additional banks streamlining their processes in order to be comparable and on par with the big four.

Opportunities for Aspiring Homeowners

Aspiring homeowners who are interested in investing this year can expect the market to free up as a result of the supply-demand balance slowing the market. However, homeowners should also note that the path of interest rates will be significant to developments in the housing market.

First Home Owners to be Hit Hardest

The new serviceability buffers are expected to hit first home buyers the hardest. This is because first home owners are more likely to need to borrow a larger sum than those who have already entered the property market and are moving on to secondary properties.

Investment Properties to Go Rural

We can expect to see more investors purchasing properties outside of capital cities such as Sydney. Investors are expected to purchase investment properties in Western Sydney, Queensland, and wider regional areas.

Slower Growth and Bigger Charges

While we expect to see property prices continue to rise in both metropolitan and regional areas, we also recognise that the rate of growth won’t be at the same pace that has been recorded over the course of the past 12-18 months. The slowed rate of growth will be attributed to the tightening of mortgage lending criteria and the speculation of interest rate rises.

As Australia begins to open up once more, a larger volume of property listings is expected over the course of 2022 as homeowners become more comfortable with the notion of buying and selling property once more. This is a clear win for property hunters who have struggled with the highly competitive market throughout the course of the pandemic.

National Housing Values to Continue Rising

Finally, it is expected that national housing values will continue to rise in the short-term, even if interest rates rise earlier than expected, which will continue to support the demand for property into the future.

Need Advice on Your Next Property Move?

Our BlueRock finance brokers are best placed to help you make informed decisions relating to the rising property prices. To further discuss buying and selling property in the current market, or for further clarity on the impacts the rising prices have had on the market, get in touch with our Melbourne-based finance team for a free consultation.

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