Why House Prices Are Soaring in 2022 (And Why It Might Be Better to Build)

Australian property prices are currently undergoing one of the most significant hikes in history. Nowhere is this more felt than in our capital cities and according to the Australian Bureau of Statistics (ABS), there has been an average growth of 23.7% to residential prices over the last 12 months in Brisbane, Sydney, Canberra and Melbourne.

But why is this happening to the real estate market? And what does it mean for people hoping to get into the market?

The goal of this article is to help you understand the changes going on in an already competitive market and to offer a solution that can provide some predictability and most importantly, affordability
 

What Has Caused House Prices to Grow?

Housing affordability has always been a fluctuating phenomenon in Australia and the situation never remains the same indefinitely. While there are many different factors that are affecting property values in 2022, the main driving forces of this growth in Australian house prices are;

Low Interest Rates

When interest rates are low, profitability is high. This causes more demand for housing supply, thus the housing prices increase. For the past 16 months, Australia experienced record low interest rates and during this time, home buyers have entered the market to take advantage of lower mortgages and repayments. And since obtaining the finances for your new home is more affordable with government grants such as the First Home Loan Deposit Scheme, activity in the market surged.

Population Growth

One of the major impacts the COVID-19 Pandemic had on home prices was buyers moving interstate. Queensland experienced the largest increase of people migrating from Sydney and Melbourne to avoid some of the country's harshest restrictions and lockdowns. Though it can be hard to pin down exactly why people were moving, it's clear that the 30,939 people that crossed the borders from June 2020 to June 2021, made an impact on the housing market.

Another significant trend that occurred as a result of the Pandemic were people staying within their states but leaving the big cities for the surrounding regions. The result of this is, according to CoreLogic's head of Australian research Eliza Owen, "higher-than-normal housing demand against unusually low levels of listings across regional Australia". Regions such as the Sunshine Coast are now experiencing markets where the median house prices are in the million-dollar range.

Why You Should Think About Building

Amidst all of the rising prices and the unpredictable property market, there remains one way to acquire a home that is less competitive and will save you in the long term, and that's building. There are many benefits and incentives available to first home buyers in Australia such as reduced stamp duty, access to government grants like the First Home Vacant Land Concession, and the freedom to customise your home however you see fits.

In Southeast Queensland, based on data from the UDIA (Urban Development Institute of Land Development) the median land price is $260,620 and one of the cheapest stamp duties of all the east coast capital cities and regions at $7,549.50 (which can be discounted to $849.50 with the First Home Land Concession).

Freedom to Customise

Creative control over the design of your newly constructed house is one of the major advantages of building over buying. Your home is where you can truly be yourself and enjoy the times with family and friends, so building can help you design the home that matches your lifestyle

Less Maintenance

It's inevitable that when you buy an existing home, you will need to do some general maintenance or renovations, and these could end up costing you more than you expected. Newly built homes will meet the most up-to-date building codes and be furnished with the latest features and finishes. And you won’t have to contend with any major fixes or improving any structural issues.

(Almost) No Competition

While building does take longer than buying, you will avoid the sometimes-stressful process of competing with other buyers, many of whom are first-time home buyers. But, it isn't always this way and competition will always exist in a competitive market. That is why when you build with Brighton Homes, we will help you gain the block of land you need to start building sooner rather than later.  

Building with Brighton Homes

When it comes to building on a block of vacant land, we are with you every step of the way towards the house you've dreamed about. The regions we build in extend from the Sunshine Coast down to the Gold Coast and all the way out to the Western Regions of Gatton and up north towards Gympie. Visit any one of our display homes in these areas and start the process with our friendly and supportive teams.

Your pre-build journey with Brighton Homes involves an 8-Step Process that will cover every stage you need to complete before getting the authority to commence building. To help at the beginning, you will only be required to pay a $3,000 deposit, with the balance of the 5% not paid until your home project is ready to go to site!

For some inspiration, visit out our Home Designs page that includes floorplans designed for modern lifestyles. And be sure to check out our brochures for a full rundown of our collections and superior inclusions.