Most searched for suburbs, property features in 2022 revealed

The skyrocketing cost of borrowing is shaping up to be one of the biggest influences on the property market, but rising rates haven’t stopped buyer demand in certain suburbs, according to a new report.

According the Domain End of Year Wrap 2022, the suburbs with the most demand this year were Birchgrove in NSW, Gisborne in Victoria, Tallebudgerra in QLD, Stirling in South Australia, Deacon in the ACT, Battery Point in Tasmania, Ludmilla in the Northern Territory and Gidgegannup in WA.

For overseas buyers, the most popular searches were Sydney, Melbourne, Middle Harbour, Chatswood and Mosman.

The most popular type of property was a four-bedroom, two-bathroom house with the most searched school catchment zone being East Doncaster in Victoria.

Lifestyle additions and location are also high on buyers’ wish lists with terms such as ‘pool’, ‘waterfront’, ‘beach’ and ‘view’ all remaining popular.

With the importance of a dedicated workspace remaining a priority, keyword searches for features such as ‘study’ are still high.

The report also covers what’s in store for 2023, with Domain’s chief of research and economics, Dr Nicola Powell, predicting that rising interest rates will continue to create a fragmented property market.

Dr Powell said after a “rollercoaster” of a year, the speed and scale at which prices soften will be largely shaped by how high interest rates go, and when and how quickly inflation eases. 

“Initially, rate hikes were a shock to potential buyers in 2022,” Dr Powell said.

“Buyers have now adjusted to this new norm and will be forward planning, pricing in a buffer for further rate hikes and more mindful of their lower borrowing capacity. 

“2023 will test the serviceability of mortgage holders as record-low fixed rates secured in 2021 begin to expire.

“However, the majority of the rate rises are now behind and they could start to fall again by late 2023.”

Dr Powell said there are also a number of other factors that will help prop up property markets including the return of immigration and continued strong demand for properties in the “right neighbourhoods”.

According to Dr Powell, 2022 marked a year where buyers gained back some control of the market after sellers have held the upper hand for a number of years.

“While house prices are continuing to fall on the back of the fastest surge in interest rates since the early 1990s, they remain significantly higher than the pandemic trough,” she said.

“House prices across the combined capitals have fallen 4.9% from the March 2022 price peak, down about $53,000. 

“However, this price cycle remains 27 per cent higher (about $218,000) than the mid-2020 trough.”

Dr Powell said that even with high higher interest rates is important to remember the long-term nature of real estate as an asset class.

“In the last 30 years, the duration and steepness of an upswing tend to be longer and greater than a downturn,” she said.

“While property prices will continue to soften in 2023, it is unlikely they will erase all the growth seen during the pandemic boom. 

“This tells us we need to view property as a long-term investment; if we do, timing becomes less important. It’s the time spent in the market that counts.”

According to Dr Powell, we are also likely to see a multi-speed market become more apparent in 2023 with some areas falling faster while others are more resilient. 

“This is because Australia consists of multiple property markets – not just one,” Dr Powell said.

“There are numerous markets within a capital city, between property types and price points. 

“They behave differently, operating at slightly different times, paces and even directions.”

Dr Powell said overall, entry-priced houses and units will hold firmer, particularly in our most expensive capital cities. 

“This will be driven by the affordability barriers of purchasing, first-home incentives and deteriorating borrowing capacity steering demand to more affordable options,” she said.

Dr Powell said going forward some suburbs will continue to have that extra appeal where buyers are willing to pay a price premium for the liveability factor. 

“The global pandemic created one of the greatest lifestyle shifts Australians have experienced – and it’ll leave a legacy,” she said.

“It has emphasised the importance of the home and our surrounding community, and the ability to work, live and play within a short distance of where we reside. 

“This has heightened our desire for more space, added security, the balance of life, the right amenities, education, sports facilities and green space. 

“The areas to watch will be the ones that offer the ultimate liveability; they may be the ones that are gentrifying, offer a certain lifestyle or have easy access to everything.”

Domain’s Popular Keyword Searches

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.

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