Given the historic year in property that was 2021, that forecasting is now well underway, with major banks, economists and commentators offering their thoughts on what lies ahead.

Despite signs price growth is slowing, many markets will still likely experience an increase over the course of this year, according to the new PropTrack Property Market Outlook 2022 report.

Released today, the analysis outlines expectations that median dwelling prices across the combined capital cities will climb between 6% and 9%.

But that pace won’t be universal, with some markets faring better than others – with an unlikely city expected to lead that growth, while bigger counterparts will slow significantly.

What’s expected in 2022

Most markets experienced extraordinary growth in home values last year.

Nationally, the combined median house price surged by 26.8% to $775,000, while the unit median rose 13.4% to $590,000.

Despite the growing expense facing would-be buyers, demand still remains much higher than supply, PropTrack director of economic research Cameron Kusher said.

Want to see how your suburb performed in 2021? Check out our interactive.

What’s expected in 2022

Most markets experienced extraordinary growth in home values last year.

Nationally, the combined median house price surged by 26.8% to $775,000, while the unit median rose 13.4% to $590,000.

Despite the growing expense facing would-be buyers, demand still remains much higher than supply, PropTrack director of economic research Cameron Kusher said.

Want to see how your suburb performed in 2021? Check out our interactive.

Similarly hot at the moment is Brisbane, with pent-up demand, a surge in interstate migration, relatively constrained supply and affordability driving growth. The Queensland capital is expected to see an increase in its median price by 8% to 11%, Mr Kusher said.

“Brisbane and Hobart are expected to see the biggest price growth among the capital cities thanks to their low supply of stock for sale, heightened demand and relatively lower prices compared to Sydney and Melbourne.”

Sydney and Melbourne, where prices have soared in recent times – despite being hit hard by the COVID-19 pandemic – are set to see growth slow over the course of the year.

“Sydney is overwhelmingly the most expensive housing market in the country,” Mr Kusher said. 

“The gap between median house and unit prices in the city compared to other regions has widened over recent times. 

“Looking only at median house prices, Sydney has a 52% price premium over Melbourne, a 105% premium over Brisbane, a 139% premium over Adelaide, a 190% premium over Perth, a 95% premium over Hobart, a 157% premium over Darwin, and a 46% premium over Canberra.”

That significant premium for homes in Sydney compared to other parts of the country may indicate a reversal over coming years.

But those waiting for a crash, so they can swoop in and nab a bargain, might be disappointed.

“This [reversal] is likely to be seen in slower price growth in Sydney compared to other regions, rather than dramatic price falls. 

“Homeowners and potential homeowners are likely to increasingly seek out better value housing outside of Sydney, especially if moving forward there is less of a need to be in the office as regularly as pre-pandemic. It may also drive new migrants to Australia to settle in other parts of the country.”

In the New South Wales capital, Mr Kusher expects dwelling prices to rise modestly by between 4% and 7%, with the same forecast for the Victorian capital.

Other smaller cities are expected to see growth, with an anticipated rate of median dwelling price growth in Adelaide of 6% to 9%, in Canberra of 6% to 9% and in Darwin of 5% to 8%.

In the west, Perth’s median dwelling price should rise by between 3% and 6%, Mr Kusher said.

“Perth has shown a stronger slowdown in price growth already relative to other capital cities, while the more expensive property prices in Sydney and Melbourne may increasingly see demand shift to more affordable housing markets,” he said.

In 2021, property prices across the country increased a staggering 23.8%, he said, but the rate of growth on a monthly and quarterly basis started to slow over the second half of the year. 

“This pace of growth is expected to continue slowing in 2022, bringing mild relief to buyers,” he said.

“A recent lift in new listings should also go some way to allow more of these buyers in the current wave to find a home. But the question is… how large is the next wave of buyers?”

A decent swell but no tsunami

Perhaps contrary to expectations, regional housing markets far outperformed capital city markets last year in terms of growth rates, largely due to COVID-driven trends that saw metropolitan residents pack up and head to the bush or beach.

Combined regional dwelling prices surged 30%, more than combined capital prices at 21.7%, but Mr Kusher said that “price growth was nevertheless strong right across the country”.

Of course, the cost of housing in major cities is still significantly higher than in regional locations.

As of December 2021, the median house price for the combined capital cities was $896,000 while for the regions it sat at $590,000. The combined capital city unit median is $622,000, while in the regions, combined, it’s $480,000.

And last year, nationally, house prices recorded stronger increases than units, up 26.8% and 13.4% respectively.

Soruce copy from RealEstate:   https://www.realestate.com.au/news/where-home-prices-will-surge-this-year-and-by-how-much-and-where-theyll-start-to-plateau/