PropTrack Housing Market Indicators Report - February 2022
The property market is off to a strong start in 2022, but not yet a match for
2021’s historic year.
PropTrack Housing Market Indicators Report is a monthly report combining eight key metrics to provide an up-to-date view of the property market and emerging trends.
The report analyses consumer behaviour in real time by extracting property market insights from the millions of Australians who visit realestate.com.au each month.
Key metrics include search activity, email enquiry, views per listing, weekly sales of properties listed for sale on realestate.com.au, days on site of properties sold, and filtered searches by price and by bedroom.
Executive Summary
Australia’s housing market is springing back to life after the holiday break, which typically brings a seasonal slowdown. The Omicron variant remains a distraction, but so far the housing market is off to a strong start – though not yet a match for 2021’s historic year.
We’re kicking off another year with many active buyers, and views per listing hitting a record-high, though a surge in new listings into the end of 2021 has provided a lot more choice, releasing some of the heat from the market.
Indicators of buyer demand show property seekers remain motivated, but after what has been an exceptional year, buyer demand is beginning to moderate from the extreme levels witnessed in 2021.
This should be welcomed in bringing what could be a more sustainable balance between buyers and sellers in the year ahead.
Where to from here?
Looking ahead, the perfect storm for property prices experienced last year won’t be repeated in 2022. The surge in prices recorded over the past year will continue to ease given the benefits of lower mortgage rates have already been converted into higher prices.
High home prices, along with bottoming mortgage rates, will slow annual price growth. And as the tailwind from low-interest rates is diminished, alongside more choice and less competition, price growth will moderate.
The moderation in buyer activity has seen 2022 kick off with a slower start compared to 2021, but still strong relative to prior years. Although, as we pass through the seasonal lull, we will get a better read on conditions. Demand is likely to continue easing from peak levels as new listings are likely to remain elevated, with would-be sellers responding to the strong price growth witnessed last year.
Sales volumes remain elevated, and this year will hopefully be less hindered by restrictions. Buyers and sellers who have held back until now will have the opportunity to transact unencumbered, providing another tailwind for activity.
Greater willingness from vendors to list their properties will provide more choice, improving the imbalance between the supply of properties for sale and demand. This should also contribute to easing price growth this year.
Key metrics in the report
Total search volume
Email enquiry by property type
Email enquiry by enquirer type
Average views per listing
Number of properties sold
Median days on site
Searches by maximum price
Searches by minimum number of bedrooms
Total search volume
Searches power ahead in Queensland
Search volumes in January 2022 were 26% higher than in December 2021, which is to be expected as the market springs back to life after the holiday shutdown.
While search volumes are up from December, at a national level search volumes are 2% lower than in November 2021 before buyers and sellers broke for the holiday period and have been trending down since October 2021.
National search volumes in January 2022 were 5% lower than in January last year, indicating that perhaps the market is off to a slower start than in 2021, though it is difficult to tell how much the swelling Omicron case count in January might have impacted search activity.
Search volumes in NSW and VIC are 3% and 6% lower respectively when compared to January last year.
However, search activity in QLD, WA, SA, NT, TAS, ACT is elevated relative to the same time last year. In QLD, search volumes in January were 13% higher year-on-year, in contrast to the declines seen in NSW and VIC.
Following several years of more modest growth, housing prices are still growing at a rapid rate in the sunshine state, supported by better affordability and strong demand from interstate migrants.
Email enquiry by property type
Consistent with the lower trending search volumes, the number of buy enquiries to real estate agents has also slipped from 2021’s elevated levels.
Enquiry on realestate.com.au for properties for sale hit a record high in October 2021.
Since last year’s peak, the volume of email enquiries to real estate agents on realestate.com.au has fallen 20.9% as lockdown restrictions have eased, meaning prospective buyers can view homes unencumbered and prospective buyer demand has moderated from 2021’s peak levels.
In January 2022, each property type recorded a monthly increase in enquiry across houses (44.0%), units (59.4%) and land (48.6%), though this is due to December’s seasonal low base effect.
In terms of the share of enquiry, houses remain the dominant type of property enquired about (59.3%), followed by units (31.4%) and then land (9.3%).
The unit share of enquiry in January 2022 (31.4%) is currently the highest it’s been in two years. This is interesting, and bears watching as 2022 unfolds.
The premium of house prices over unit prices has reached record highs, with the pandemic driving one of the biggest shifts we’ve ever seen when it comes to housing preferences.
But with credit conditions tightening and a normalisation of migration placing renewed pressure on inner city rental markets, demand for units could rise as buyers look for affordable options and international borders reopen.
Email enquiry by enquirer type
Investor comeback continues
The volume of enquiry to real estate agents from all buyer types rose 43.5% in January 2022 from December’s seasonal lows.
This is similar to the large pick up seen from December 2020’s lows to January 2021, where enquiry volumes rose 45.9% month-on-month.
Though buyers have clearly returned from the holidays motivated, 2022 does not appear to be kicking off with quite the same vigour as 2021. Overall, enquiry volumes for all buyer types have fallen 22.2% year-on-year from the all-time high enquiry recorded in January 2021.
Given property seekers can turn-up for inspections in-person now in all states, this may be a factor behind slowing email enquiry.
Enquiry from buyers, typically owner-occupiers, rose by 44.1% in January from December’s low level of enquiry and 7.7% from the volume of enquiry seen in November 2021. However, it has fallen 47.1% year-on-year from peak levels recorded in January 2021. Despite this, interest from first home buyers (8.8%) and investors (30.4%) has grown since January 2021.
Investor enquiry climbed steadily through 2021 and is now 30.4% higher year-on-year, with the share of enquiry from investors (25.6%) hovering around the highest level (25.8%) recorded in more than three years and this is another reason why we could see increased demand for units.
As per the aforementioned, the premium of house prices over unit prices has reached record highs. With credit conditions tightening and a normalisation of migration placing renewed pressure on inner city rental markets, investors may capitalise on the unit discount. As such investor activity is likely to remain a feature of 2022.
Demand from first-home buyers in 2021 was buoyed by historic low borrowing costs and government incentives.
First home buyer enquiry in January 2022 is 8.8% higher year-on-year but has fallen 23.8% from the peak levels recorded in September 2021. This is to be expected as incentives expire, and higher house prices increase the deposit hurdle for first home buyers.
According to the ABS, lending to first home buyers has also tapered from strong levels recorded in 2021, again to be expected given the largest barrier to housing affordability is not serviceability, it’s the deposit hurdle.
Average views per listing
Views per listing continue to hit record highs
In January 2022, views per listing surged 48.2% month-on-month to reach a new historic high – though this is in part due to the low base effects following the December slowdown.
At a national level, views per listing are 41.9% higher than this time last year and 21.5% higher than in November 2021.
Demand based on the number of views per listing on realestate.com.au was strong right across the country, with historic high views per listing in all states bar Victoria.
Breaking it down further, views per listing have seen the largest year-on-year uptick in Brisbane (+81.5%), Adelaide (+70.1%), regional SA (+92.4%) and regional NSW (+68.0%). All regional counterparts in each respective state bar the NT have seen views per listing surge more than 35% year-on-year.
Views per listing are at record highs in every GGCCSA region except Sydney, and regional NT.
Historic views per listing levels reflect both very high interest from buyers and the relatively low volume of stock available for sale, particularly in regional areas.
The good news for buyers is that we have started to see more stock for sale coming to market. Although, in some areas like regional SA, Adelaide and Brisbane the available supply of properties for sale remains very constrained.
The continuing disconnect between the supply of stock for sale and buyer demand is likely to continue to create upwards price pressures.
Number of properties sold
Sales off to a strong start
Sales volumes are tracking at a very similar pace to the first five weeks of 2021. Though the trend is similar, transaction volumes, whilst still strong, are off to a slightly slower start.
The market has seen the momentum of 2021 carry into early 2022 and preliminary weekly sales volumes to-date this year are just 8% lower than over the same period last year but remain 21% higher than the same period in 2020.
To-date this year, sales volumes are off to a slower start compared to the same period last year in every state. The exception is Western Australia, where sales volumes to-date this year are 6% higher than over the same period last year.
Sales volumes in January 2022 were 9.7% lower than in January 2021, with every state recording fewer sales in January 2022 compared to the same period last year, again with the exception of Western Australia.
However, auction volumes to date this year continue to outpace the same period last year and with new listings remaining elevated as Omicron cases subside, buyers and sellers who have held back until now will have the opportunity to transact unencumbered, providing a tailwind for sales volumes into February.
At a national level, week 5 in 2022 recorded just 2.7% fewer sales than the same week last year. Though Queensland and South Australia stand out here, recording 5.7% and 4.0% more sales respectively than the corresponding week in 2021.
Although January 2022 was a slower start than in 2021 for both states, with search activity and views per listing highlighting that property seekers in these states remain highly motivated it seems likely that February 2022 sales volumes could outpace the same period last year as conditions remain stronger in these markets.
Median days on site
Days on site climb as holidays bring a seasonal lull
The median number of days a property was listed on realestate.com.au in January 2022 was 54 days, up from 32 days in December.
While the average time it took for properties to sell increased in January 2022, properties in every GCCSA region are still selling more quickly than they were this time last year, with the exception of Melbourne, Hobart, Darwin and regional NT.
Nationally, properties listed for sale spent 8 days less on site in January 2022 compared to January 2021. The big stand out is regional SA where the time properties are listed for sale on site has fallen by 54 days from the same period a year ago.
Properties in the ACT continued to sell quickly, averaging 41 days on site in January 2022. Hobart and Adelaide averaged 39 and 44 days respectively.
The increase in the time taken to sell is to be expected given the holiday period brings a seasonal lull in activity. This year the December 2021 to January 2022 increase in days on site was larger in every state compared to the December 2020 to January 2021 holiday period.
Perhaps this is an indicator that buyer demand is beginning to moderate from the extreme levels witnessed in 2021, releasing some of the heat from the market.
Though, the second last week of December 2021 hailed a fresh weekly record for the year in terms of sales volumes as vendors who had delayed listing in lockdown raced to transact before year end. Perhaps it’s simply too early to say.
That said, we do expect that greater willingness from sellers to list their properties this year should mean more choice and an improved balance between supply and demand.
We have seen the strength in new listings and auction volumes of late 2021 carry on into early 2022. Some of this is likely due to the disruption to sellers’ plans during last year’s lockdowns, while other sellers are motivated to list now to take advantage of recent price growth and elevated demand before interest rates rise.
We expect new listings are likely to remain elevated as would-be sellers respond to strong price growth and a hopefully lockdown-free year results in vendors feeling more comfortable listing their properties.
With more supply and fewer competing bidders, properties are also likely to be on the market longer. These factors should also contribute to easing the pace of price growth this year.
Searches by maximum price
Increasing number of price filtered searches for properties priced at or above $1 million
The fastest annual pace of price growth in more than three decades has meant that prospective buyers are looking at higher price points.
Throughout the combined capital cities, just under half (45.2%) of searches were for properties listed at a price over $1 million. A year ago, that share was just 36.8%.
In the regions, the share of searches for properties listed at a price over $1m million has reached 31.7% compared to just 19.0% a year ago, almost triple the average pre-pandemic share.
Throughout the combined capital cities in January 2022, 42.2% of searches were for properties listed at a price between $500,000 and $1 million compared to 48.5% a year earlier.
Searches for properties at or above $1 million were at 45.2% compared to 36.8% a year earlier, while 12.6% of searches were for properties listed below $500,000 compared to 14.7% a year earlier.
Demand remains strong and borrowing costs remain low, despite fixed rates having begun to climb.
The pace of price growth is moderating but it would be reasonable to expect a further increase in higher priced searches as the hottest property market in decades has pushed housing prices higher Australia-wide.
Searches by minimum number of bedrooms
Property seekers continue to scope out homes with three or more bedrooms
Share of total dwelling searches by minimum number of bedrooms
Jan-21 vs Jan-22
The majority of property seekers continue to search for a minimum of three bedrooms.
In January 2022, 68.0% of filtered searches on realestate.com.au across the capital cities were seeking a minimum of three bedrooms. This trend is also playing out in regional areas where 72.5% of filtered searches were seeking a minimum of three bedrooms.
Space will continue to be an important factor for many buyers, despite price rises, we expect demand for larger properties will likely remain substantial given the experience of lockdowns and the COVID-19 induced preference shift towards larger homes and lifestyle.
Indeed the past year has seen house prices grow at a much faster rate than units as these housing preferences have been reassessed.
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