The 2022 Australian Housing Market: A Year in Review

Australia’s housing market has weathered the storm of 2022, proving itself resilient, despite significant increases in
interest rates and the end of a once-in-a-generation house price boom. Let’s dive into the key events and trends of the
past year and forecast what’s to come in 2023.

A Roller Coaster Ride in the Australian Economy
The Australian economy has experienced a topsy-turvy year. The property market began 2022 on a high, at the tail end
of a boom. However, the first interest rate increases in more than a decade knocked the markets off balance, leading to
plenty of doom and gloom predictions of house price crashes.

The Impact of Interest Rates
Despite these increases in interest rates, Australia’s housing market proved resilient. In fact, it could be argued that the
interest rates simply acted as a necessary brake on the market following the unprecedented house price boom in 2021.

The Real Story of House Price Changes
When it comes to house prices, the story of 2022 is more nuanced than the headlines might suggest. Despite the
predictions of a 10% or even 20% drop in house prices, the national result was a far more modest decline of 3.7%. This
figure represents the lowest of all declines recorded in the national capital city house price series in the modern era.

The Resilience of Units
Interestingly, units outperformed houses for price growth over the year. The decline in Sydney was less severe for units
than for houses. Meanwhile, Brisbane and Adelaide witnessed robust growth in unit prices.

The Two-Year Picture
To gain a fuller understanding of the state of the market, it’s instructive to look at the two-year picture. Despite the falls
in 2022, Sydney prices remain 23.7% higher over the past two years, while Melbourne is up 17%. Brisbane, Adelaide,
and Perth have all seen significant growth over the past two years, with Brisbane up 35%, Adelaide up 30%, and Perth
up 20%.

The Impact of Migration
One of the key factors impacting the housing market in 2022 was the surge in migration. With the borders reopening,
there was a significant increase in migration, which had a notable impact on the housing market. This influx of migrants
will undoubtedly continue to place upward pressure on prices and rents in undersupplied housing markets.

The Outlook for 2023
The outlook for the Australian housing market in 2023 is positive. The market has finished the year on a strong note,
and there are several factors that suggest this trend will continue into the new year. With interest rate rises set to ease
and migration surges expected, the housing market is well set up for further growth.

The Role of Auctions
Auctions play a significant role in the Australian housing market, with solid results seen in 2022. In fact, the latest
auction results suggest that the market is holding up well, with clearance rates in Melbourne and Sydney well above
where they were at the end of 2018.

The Impact of Seasonality
The end of the year typically sees a slowdown in the housing market, with fewer buyers and sellers active. This seasonal
effect was evident in the auction market in 2022, with clearance rates easing in December. However, the market
remained robust, and the numbers for December would have been record-breaking just a few years ago.

Conclusion
In conclusion, the Australian housing market has proven itself to be resilient in 2022, despite significant challenges.
The market has remained robust, with house prices faring better than many had predicted. This resilience, along with
positive economic indicators and a surge in migration, suggests that the outlook for 2023 is positive. This resilience
should give confidence to both buyers and sellers as we head into the new year.

The Final Word
The final word for 2022 is that the Australian housing market has proved itself to be resilient and robust. Despite the
challenges of the year, the market has held up well, and the outlook for 2023 is positive. This resilience is a testament
to the strength of the Australian housing market and bodes well for the future.