1. An increase in properties being listed for sale, or as agents say, 'an increase in stock levels'.

People who saw their neighbour's property sell in 2021 for more than they ever imagined will be listing their properties for sale in 2022 (or have already) and as such buyers can expect to have more choice when looking for a new home. Overall this is great news for buyers, however, be mindful that 'A grade' properties (the properties that tick most people's boxes) will always be highly sought after and drive a premium price.

2. Property prices will stabilise.

The market is unlikely to see the bullish 29.6% price growth that was seen in 2021* which is great news for buyers and especially first home buyers who are trying to save faster than the market increases. With an increase in stock levels, the supply and demand is expected to re-balance which will stabilise prices. Some Vendors may maintain unrealistic 2021 expectations which may result in listings sitting on the market longer and/or an increase in properties being passed in at auction.

3. Investors with mortgages against multiple properties may struggle to gain any further finance.

At the end of 2021, APRA** mandated that banks increase the rate at which they determine customers can repay their home loan from 2.5% to 3% above the actual interest rate the customer is being charged. This, combined with actions to limit the total debt to income levels customers are taking on may see investors with multiple loans struggle to find further finance. This may also harm single first home buyers who do not have large amounts of cash flow remaining so a good idea to check in with your broker.

There are no crystal balls to the Sydney property market, and if the election year is anything like in 2019 when Labor proposed a grandfathering of negative gearing only to sensationally lose the election, we can expect housing affordability and accessibility to be front and centre of the media throughout 2022.

Keep your head down, stick to your strategy, and happy house hunting.

*Core Logic December home index values

** Australian Prudential Regulation Authority and overseeing government body for banks