The Australian real estate market has had a solid finish in a very strong year.
In December, market activity surged as many vendors that delayed listing during the blockade went on sale by the end of the year. Buyers responded by selling more properties in the final second week of December than in any other week in 2021.
Buyer demand remains strong, but there are signs that the market is slowing and the number of searches and inquiries to buy has been declining since October.
Nonetheless, the property for sale in December continued to sell at record speeds.
Following the seasonal decline brought about by the holidays, buyer and seller activity is expected to recover in late January. Price increases, which have exceeded 20% in the last 12 months, are likely to have peaked and are expected to rise more moderately in 2022.
Quiet end of a noisy year
In all states and territories, the number of searches to buy real estate declined in the fourth quarter of 2021.
Given the seasonal impact of holidays, it is expected to decline, but in 2021, only December saw no national search volume above 2020 levels.
Compared to the previous year, Queensland recorded the strongest growth in the search for “for sale”, supported by high levels of migration between states.
In contrast, Victoria is showing the biggest decline year-on-year.
As the number of searches decreased, the number of purchase inquiries to real estate agents continued to decrease in December.
First homebuyers accounted for the largest decline in inquiries.
As a percentage of all purchasers, inquiries from first-time purchasers have been declining since October. In December, it accounted for 32.9% of all inquiries, compared to the peak of 36.1% in August.
In contrast, the percentage of investor inquiries has steadily increased, reaching 25.7% in December. This is the highest percentage seen in over 2 years.
More listings competing for eyeballs
As the weather warms, Christmas approaches, and holidays begin, the average number of views per December list generally decreases.
However, the decline in views seen in December 2021 was greater than that seen in the previous year.
One explanation could be a surge in the number of properties for sale.
Listed properties have gained record-breaking views as the supply of properties for sale has fallen significantly below buyers’ demand for the past 12 months.
Given the increase in supply in December and the slight softening of buyer demand, this decline in average view is not surprising.
Between November and December, New South Wales (-21%) and Victoria (-20%) saw the largest decrease in average views per “on sale” list.
Western Australia (-10%) and Tasmania (-11%) had the smallest monthly declines.
More properties sold, faster
Throughout 2021, the number of properties sold remained above the levels seen in the last two years.
Nationally, the total number of properties for sale on realestate.com.au increased by 39% in 2021 compared to 2020 and 61% from 2019.
In 2021, total sales increased in all states and territories, up 53% in Victoria and 44% in the Northern Territory.
The average time it took to sell a property increased slightly in December, but remained close to record speed.
Throughout Australia in December, the average time for homes for sale to remain on realestate.com.au was November 30-31.
Properties in the Australian Capital Territory continued to sell fastest, with an average sales time of 22 days on the site. Victoria and New South Wales continued on the 27th and 28th, respectively.
Comparing 2021 and 2020, WA and NT show the largest reduction in average time to sell, both down 27 days.
Nationwide, the properties for sale spent 18 days less on the premises in 2021 compared to the previous year.
Price increase reflected in the search
The surge in home prices across Australia over the last 12 months has shaped search activity.
Comparing December 2021 and December 2020, the percentage of buyers searching for properties in the capital at levels above $ 1 million increased from 35.8% to 43.9%.
This increase was even more pronounced in areas where more than $ 1 million of properties accounted for 30% of searches, up from 18.7% in the previous year.
Throughout the Australian capital, properties ranging from $ 750,000 to $ 1 million exceeded $ 500,000 to $ 750,000, making them the most searched properties. In rural areas, properties between $ 500,000 and $ 750,000 were the most searched in 2021.
In the Tokyo metropolitan area, the number of searches increased the most in categories over $ 3 million, accounting for 5.9% of all searches in December 2021 from 3.8% in 2020.
On the other hand, an important trend seen throughout the pandemic is the desire for more space, probably due to the increase in remote work. This has significantly increased the number of buyers searching for three or more bedrooms throughout 2020.
Significant price increases seem to have eased this trend, with a slight decline in searches for 3-bedroom plus properties since 2021.