How We Got To 2022. Five Influencing Factors On The Southern Downs Property Market In 2021

The property market across the Southern Downs Region has experienced some large shifts and gains over the last few years causing some property owners to be unsure of the right time to sell their properties. Potential sellers are wondering whether prices will continue to rise and when the best time to sell will present itself.

"Should I hang on to my property for longer and try to make more gains or should I sell my property now while the market is good?" The shifts in the market have caused some angst for sellers, only trying their best to capitalise on their own investments.

There are 5 key influencing factors in our region’s property market that stand out, so let’s delve into what they were and what it might mean for the 2022 property market.

1. PEOPLE:

In the first quarter of 2021, the Southern Downs Region recorded the second largest growth in capital of all local government areas due to regional migration. Regional migration can be characterised as the movement of people from one region to another. Simply put, in that quarter of 2021, our region had the second largest influx of people, surpassed only by Noosa.

The main effect: Property and rental prices increased, and residents who were not yet in the property market in their own home found it harder to enter. The other main effect was that due to the increased population and an already low vacancy rate, gaining entry into rental accommodation became increasingly harder. This second trend has been replicated across Australia and is causing major instability for families and individuals who rent.

2. PROPERTY:

Due to the migration influx around the region, stock on the market for homes and townhouses changed -31.64% compared to 2020 and the amount of days that properties were listed on the market fell by almost 3 weeks. What this means is that less stock entered the market and snapped up faster. Warwick recorded a 24.9% elevation in housing values over 2021 - the fastest annual growth rate since the 12 months ending in August 2004. The regional area of Stanthorpe led the housing values meteoric rise, going up 28.8% and the eastern region of the Southern Downs not far behind at 27.7%. Towards the end of 2021, the rise in new listings began to outweigh buyer demand, giving potential buyers more time to make the decision to buy a property and potentially steady the prices of properties.

The main effect: Vacancy rates sitting at a historic low of 0.26% has created significant instability for renters looking for a home. Regions across Australia have witnessed a surge of homelessness or the fear of homelessness amongst those who do not own their primary place of residence. In a balanced market, a vacancy rate of 3% is considered ‘healthy’ and 2% is considered ‘low’; so it stands to reason that 0.26% is concerning. It does present a unique opportunity for investors to buy into the region through new builds and estates for the purpose of filling the gap in the rental market.

3. PRICES:

With just the two primary influences mentioned above, it stands to reason that property and rental prices increased throughout 2021. With such a volatile market, mechanisms are being put into place to steady the market and restore some balance. The next most likely move in 2022 from the Reserve Bank is to raise interest rates, though it is expected that the ramifications aren't likely to be too dramatic and designed to not make huge destructive impacts on an already fragile market.

The main effect: With signs of the 2021 boom wearing off with forces such as affordability pressures, tightened lending restrictions, rising stock levels, and the potential for interest rates to rise sooner than expected, some buyers have been rushing to sell, adding more stock onto the market. These are just some of the influencing factors that are steadying the market and restoring balance. It is not predicted that our region will see a fall in housing prices.

4. PANDEMIC:

It seems almost illogical that when the globe is in the grips of a pandemic, that property prices would soar upwards. Prior to the pandemic, houses were set to enter a cyclical upswing at the start of 2020. The pandemic interrupted this and housing prices contracted all across Australia during the June 2020 quarter. Australian housing market values in the first half of 2021, garnered an impressive surge of 12.2%. The rises in residential property prices have been greater than estimated would have occurred in a no-COVID-19 scenario.

The main effect: Residential property price growth is expected to temper over the next 2 to 3 years as lower population growth, reversion back to equilibrium and higher mortgage lending rates weigh on property prices.

5. POTENTIAL:

If there’s one universal thing that the pandemic has taught us, it is that predictions about what the future might hold can change on a dime. What we can conclude though is that the Southern Downs Region is an adaptable, strong and resilient region and one worthy of investing in. With huge changes, our region made swift changes and adapted well. Our location has also seen the region positioned as desirable for business investments and new projects are currently underway or planning to start.

The main effect: The future of the Southern Downs Region is looking very bright indeed. Projects such as the ACCIONA MacIntyre Windfarm are set to inject millions of dollars into the region’s businesses and property market with ACCIONA themselves predicting a $500 million local spend during construction. 2022 is set to be another huge year of development for Warwick and the Southern Downs region, with a stack of new and existing projects providing regional investment opportunities. Keep up with major projects here.

IN RESPONSE TO ALL OF THESE CHANGES, WE’VE DEVELOPED A COMPREHENSIVE PICTURE OF THE REAL ESTATE MARKET IN THE SOUTHERN DOWNS REGION WHERE WE LOOK AT THESE 5 INFLUENCES OF 2021 IN AN IN-DEPTH STUDY AND WHAT THEY MIGHT MEAN FOR 2022 AND BEYOND.