_Seven of Australia’s eight capital cities record double-digit price growth

Australia was the fifth strongest residential market in the world at the end of September 2021 with 18.9%, as seven of eight capital cities recorded double-digit price growth.

The last time Australia was in the Top 5 was in the last quarter of 2015 being ranked 4th, with 10.7% annual growth, a good yardstick to demonstrate the current strength and resilience of the global housing market despite living through a global pandemic.

The Australian residential market is likely to slow, albeit still active, with forecast growth of 8% by Knight Frank Research by the end of 2022.

The main reason will be the tipping point in affordability with recent further restrictions placed on borrowers by the Australian Prudential Regulation Authority (APRA).

For those priced out of the larger capital cities, despite the rise in accumulated household savings, they may be redirected towards alternate investment opportunities, home renovations or extensions instead of upsizing to a new home, plus the temptation of extensive travel as borders reopen to Australians.

Other points to consider are more properties are likely to come to the market in the new year as we’ve seen in the lead up to the festive season and we may start to see more hesitation of buyers’ overcommitting when considering increasing interest rates on the horizon.

So, despite Australian’s continuing to reassess how they live, we’ve now arrived at the point where many vendors will need to adjust their price expectations in 2022.

How did each major city and regional area perform? Read our latest Australian Residential Review here.