2021 wasn’t the best year for many, but in the property realm, it was a great time for sellers and investors. Due to the staggering increase in the value of houses and apartments, the second half of 2021 did not work in favour of new owner-occupiers and first home buyers.
Yes, interest rates were at a record low, but that came at a price. According to Domain, property prices grew a whopping 21.9% in 2021, the fastest growing annual rate on record.

There are some changes and slight variations in home loan trends predicted to occur in 2022 and have already, in fact, taken place…

Property prices to slow down

The property growth rate is predicted to drop to 6-7% in 2022 and even further in 2023. There will be less demand for home purchases thanks to the rise in house prices and APRA’s lending restrictions.

Variable rates for low interest rates

The number of variable interest rates below 2% has grown, with 86% of the RateCity database cutting at least one variable rate in 2021. The flipside? Fixed rates will continue to rise as the economy stabilises and we approach the end of the RBA’s record low cash rate trend.

Continue to be an investor’s market

First home buyer demand has been on the decline since the second half of 2021, and as historic low interest rates and the overall ease of lending restrictions continue, investors will be dominating the property market for at least the start of 2022.

Lending rules will get tighter

It is going to get tougher taking out a home loan with APRA’s current rule changes that are expected to get even tighter in the new year. The statutory authority has signalled that there might be even more restriction measures such as further limits on debt to income ratios in 2022.

With all these trends already taking place, what is our advice?

As cliché as it sounds, you will need to continue to work hard ensuring that you can put yourself in a comfortable financial position so that obstacles, such as tighter lending restrictions in 2022, will not have an impact on your ability to take out a home loan or refinance your current one.

Contact us if you would like to book a consultation with one of our expert team members in the new year.

CONTACT US TO ENQUIRE TODAY