Australia's property boom reaches a 33-year high
The Australian property market 2022 opened with a strong surge. National housing values rose 1.1% in January, and the annual growth rate reached 22.4%, the fastest pace since June 1989. For buyers and investors, these numbers have direct implications for your next move.
National overview
Australian property values rose across every major market in January 2022. A typical Australian home now costs around $131,000 more than it did a year earlier, pushed higher by tight supply and persistent buyer demand.
Median house values crossed $1 million in Sydney, Melbourne and Canberra. Sydney’s median climbed to just under $1.39 million, reflecting years of accumulated demand in Australia’s largest city.
The gap between national median house and unit values hit a record 28.3%. As houses become less accessible by price, more buyers are expected to consider units and medium-density options.
Sales activity was 15.1% higher than January the previous year and 39.4% above the five-year average. Use our borrowing power calculator to see what you could realistically borrow in today’s market.
Capital city results
Brisbane and Adelaide led capital city growth in January 2022, rising 2.3% and 2.2% respectively. Relative affordability and strong interstate migration continued to attract buyers to both cities.
Sydney and Melbourne recorded softer monthly gains of 0.6% and 0.2%. Supply in these markets has normalised over recent months, reducing some of the urgency that drove sharper price gains in 2021. Perth and Darwin gained 0.6% and 0.5% respectively.
For a longer view of how the Sydney and Melbourne property market has shifted in recent years, our earlier analysis provides useful context for buyers weighing up where to buy.
Regional surge
Regional Australia outperformed the capital cities in January 2022. The combined regional index rose 1.8% for the month and 6.3% over the three months to January, compared with 0.8% and 2.6% for combined capitals over the same period.
Home sales in regional areas ran 57.9% above the five-year average. Lifestyle locations with commuter access, such as the Sunshine Coast, Southern Highlands and Shoalhaven, were among the strongest performers over the past year.
Regional Queensland grew by 2% and regional South Australia by 2.1% in January. Rural regional markets in the Central West and Capital Region of NSW also gained momentum, showing the demand shift extends beyond coastal lifestyle areas.
Competition in regional markets is real. Having your home loan pre-approved before you inspect puts you in a much stronger position when the right property comes up.
Rents and yields
National rents rose 9% in the year to January 2022, just under the recent peak of 9.4% recorded in November 2021. Quarterly rental growth eased to 2% for the three months to January, down from the peak of 3.2% in the March 2021 quarter.
Despite firm rental growth, the gross rental yield fell to a record low of 3.21%. Property prices rose faster than rents, compressing the income return for investors.
Lower yields do not necessarily mean poor investment outcomes. Capital growth has been strong, and many investors weigh total return, combining rental income with capital appreciation, when assessing a property. Reading about the RBA interest rate forecast for 2022 will help you factor potential borrowing cost changes into your planning.
What this means for you
The Australian property market 2022 presents real opportunities alongside growing affordability pressures. Supply is normalising in Sydney and Melbourne, which may moderate price growth in those cities. Brisbane, Adelaide and most regional markets remain tightly held, with ongoing buyer competition.
Preparation matters more in this environment. Buyers who arrive with finance confirmed and a clear sense of their budget tend to perform better when competition is strong.
At Serres Property Finance, we work with a range of lenders to find the right home loan for your situation. Whether you’re buying in a capital city or a regional area, we can help you get pre-approved and position yourself confidently in the market. Speak to our team to get started.
Common questions
Q: How much did Australian property prices grow in the year to January 2022?
National dwelling values rose 22.4% in the 12 months to January 2022. This was the fastest annual growth rate since the year to June 1989, adding around $131,000 to the value of a typical Australian home.
Q: Which cities had the strongest property growth in January 2022?
Brisbane and Adelaide led monthly capital city growth at 2.3% and 2.2% respectively. Regional Australia outperformed overall, with the combined regional index rising 1.8% for the month and 6.3% for the preceding three months.
Q: What does strong price growth mean for first home buyers?
Rising prices make entry harder, especially in Sydney and Melbourne. However, softer conditions in those cities and stronger growth in Brisbane, Adelaide and regional areas may offer more accessible entry points. Getting pre-approved before you start searching gives you clarity on your budget and a stronger position at the table.