Sydney house prices to reach new heights in 2022

House prices are expected to surge as domestic borders open and international travel resumes, according to experts surveyed by financial comparison site, Finder.

The Finder RBA Cash Rate Survey reports the views of 38 experts and economists about issues relating to the state of the economy.

More than half of those surveyed believed the reopening of borders would contribute to rising property prices, with the surge being driven by both owner-occupier and local investors.  

Head of consumer research at Finder, Graham Cooke, said the opening of international borders, and the return of potential overseas investors, may re-fuel the market even further. 

Sydney predicted to experience significant price growth

Experts have predicted an eight per cent increase to house prices in Sydney, which would see costs increase more than $100,000 by the end of 2022.

Houses were forecasted to have better price growth compared to apartments in all cities. 

Mr Cooke said the average homeowner in Sydney was due to make $342,306 over 2021 and 2022.

“Sydney homeowners stand to make an eye-watering 3.5 times the average household salary of $97,211 just on their property,” Mr Cooke said.

“Melbournians are a distant second, with the average homeowner merely making 1.6 times the average salary,” he said.

Almost half of those surveyed believed there had been an increase in banks knocking back loans due to final auction prices being higher than their own internal valuation.

Mr Cooke said it wasn’t surprising that banks were dubious about listing prices.

“It’s an agent’s job to garner as much hype as possible on their listed property,” he said.

“In turn this is putting more pressure on Aussie borrowers, and banks may be hesitant to take on extra risk.

“The home ownership dream is clearly still alive, but housing affordability is making the dream more difficult to come true,” he said.

Investor uprise, first home buyers pushed out of market

More than half of experts agreed that first home buyers were being pushed out of the property market due to increasing investor activity.

According to the ABS, Australian investors borrowed $9.75 billion in mortgage debt in September this year – the highest level in six years. 

June through to August was the highest 3-month period with regards to the number of investor loans approved around Australia, with 55,680 loans approved. 

Mr Cooke said recent events had seen investor interest explode over the past 12 months.

“In 2020 investors were pretty cautious about property due to a number of pandemic-related policies that made it mostly unappealing to own a rental property,” he said.

“However, investors have cautiously started stepping back into the market since the eviction moratorium expired in most states in September last year.”

Two-thirds of experts believe that the October to December quarter will see even more investor loans.

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Nicole Madigan

Nicole Madigan is Senior Journalist and Content Producer for Elite Agent.