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Investing in Property in 2022

 February 3, 2022

By  Chase Edwards

Many experts predict that the economy will begin to bounce back in 2022, which should excite residential property investors. However, with this economic growth comes a few caveats.

The economy is expected to grow by 3.75% in 2021/22 (compared to 1.5% the previous year) which would be a much-needed boost. However, a sooner than forecasted rise in interest rates and delays in re-opening international borders could inhibit this growth.

The Federal Government’s “Mid-Year Economic and Fiscal Outlook”, released in December, was much more positive than previous years. The report predicted a drop in unemployment to 4.5% and 4.25% in 2022/23 and wage growth of 2.25% and 2.75%. All these factors should help drive the property market.

Hayden Groves is the President of the Real Estate Institute of Australia. He recently conducted an interview with Domain where he explained how this economic growth ties into the Real Estate Market. “The economy and the Australian property market are always significantly intertwined, and as the economy – and wage and profit conditions – improve, then people have a lot more confidence about investing in property”, stated Groves. “Their family balance sheets are looking healthier, they see the value of their own homes increase, they’re ready to move to homes that better suit their aspirational lifestyle, and they’re happy to put more money into property.”

As the Borders continue to open, Groves believes that Australia will also see a rise in rents due to more and more demand for rental properties. In time this rise in rent will also feed the properties capital growth.

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