After an extremely strong 12 months, the property market has closed out the year with a bit of a whimper. House values may have increased by 22.1% over 2021, but growth has significantly slowed, down to 1% for December. This has been led by softening Sydney and Melbourne markets, both of which recorded their worst results since October 2020.
But it is not all bad news, with a few key markets showing no signs of slowing. In fact, Brisbane, Adelaide, and regional Queensland closed the year out with their strongest recent monthly performance.
The varying fortunes we are seeing across the country are largely being chalked up to affordability and availability. That said, the areas that have performed the best over the last month have also been key targets for domestic migration. And, with most internal borders now open, this trend could have an even greater impact over the next few months.
Many analysts are also keen to highlight the renewed strength of regional markets, which are comfortably outperforming the capitals on a combined basis. In these areas, availability is seen as a particular challenge, with listings down 35.9% on the 5-year average. There is also sustained interest from those looking to relocate from the capitals, with many locations offering significant lifestyle appeal.
On the rental side, things are a little more complex with median rents up, but rental yields down. This is mostly because The rental market has also maintained its recent form, with median rents up and yields down. That said, we are seeing a notable strengthening of demand for unit rentals, particularly in major markets like Sydney and Melbourne. As a result, unit rent growth has begun to outpace house rent growth, reversing the recent trend.
Wrap Up of 2021
With 2021 now behind us, we wanted to take a moment to reflect on the last 12 months. All in all, it was an interesting year for the market with plenty of ups and downs. There were also a few interesting trends that emerged and a couple of important lessons for investors.
Here is what we will remember about 2021:
What to expect from 2022
The start of the year is also a great time to look ahead and consider the conditions we are likely to face. While the outlook is not entirely rosy, there are at least a few bright spots on the horizon. And, for astute investors, this year still promises plenty of interesting opportunities.
Here is what we will be looking out for in 2022:
Suburb Spotlight: Kincumber (NSW)
Sitting on NSW’s popular Central Coast, Kincumber is a great example of why the area was so popular in 2021. While only approximately 90km from the centre of Sydney, it feels a world away, with its leafy surrounds and coastal vibe. This has traditionally made it popular with holidaymakers and retirees, but more recently, young families have started to see its appeal.
Despite not being beachfront, Kincumber is considered by many to be one of the best located towns on the coast. It is right on the doorstep of some of the area’s best beaches, walking trails, and shopping and dining options. Kincumber also enjoys easy access to a great range of local amenities, including a shopping centre and well-regarded schools.
Despite this, property in Kincumber remains reasonably affordable, with a median house price that currently sits comfortably under $700,000. This is particularly impressive when compared to some of the town’s millionaire neighbours, like Copacabana and Avoca Beach. But recent interest is helping close this gap, with house prices up 37% over the last year and townhouse prices up over 80%.
Kincumber’s rental market has performed just as well over the last 12 months, with house rents up 20%. And, with median weekly rents now around $600, investors in the area can expect a yield of more than 4.5%. This means that, whatever your investment strategy and goals, you are sure to find something suitable in Kincumber.
At Search Party Property, we specialise in developing tailored investment strategies and will work with you to come up with a suitable plan of attack. We also regularly assess your strategy ensuring that it is fit for purpose and delivering the desired results.