The biggest annual property price jump in over 30 years.
The property market in January 2022 delivered extraordinary results. CoreLogic data showed dwelling values climbed 1.1% in January alone, capping off a 22.4% annual increase. That is the strongest yearly gain recorded since the 12 months to June 1989. A typical Australian home was worth $131,326 more than it was 12 months earlier.
Whether you are buying, selling or investing, understanding these numbers helps you make smarter decisions about timing, location and how much to borrow. Use our borrowing power calculator to see what the current market means for your budget.
What happened
Median house values crossed the $1 million mark in three capital cities: Sydney, Melbourne and Canberra. Sydney led the pack with its median sitting just under $1.39 million.
Brisbane and Adelaide posted the fastest monthly growth, rising 2.3% and 2.2% respectively. Affordable prices and strong internal migration continue to drive demand in both cities. Growth in Melbourne (0.2%), Darwin (0.5%), and both Perth and Sydney (0.6% each) was softer by comparison.
Nationally, houses rose 1.3% while units gained just 0.3%. The gap between the national median house and unit price reached a record 28.3%, which may push more buyers toward the more affordable unit market. Sales activity nationally was 15.1% above January 2021 and 39.4% above the five-year average.
Regional Australia
The performance gap between regional areas and the capital cities widened further in January 2022. The combined regional index rose 1.8% for the month, compared with 0.8% for combined capital cities. Over the prior three months, regional areas gained 6.3% while the capitals gained 2.6%.
Regional Queensland and regional South Australia led the charge at 2% and 2.1% respectively. Every other regional area recorded at least 1.2%, reflecting broad demand well beyond city limits. Home sales in regional markets were 57.9% above the five-year average, compared with 26.6% for capital cities.
Over the past 12 months, the strongest markets have been commutable lifestyle areas such as the Southern Highlands, Shoalhaven, Sunshine Coast and the Hunter Valley. More recently, rural regions like the Central West and Capital Region of NSW have also climbed the rankings. Compared to the January 2021 property market, where the capital city recovery dominated, the regional story has only grown stronger.
Rental market
National rents continued rising, though the quarterly pace of growth eased from the peak of 3.2% in the March 2021 quarter to 2% over the three months to January 2022. Annually, rents were up 9%, just below the recent peak of 9.4% recorded in November 2021.
The gross rental yield fell to a record low of 3.21%. Rising property values have outpaced rent growth, compressing returns for investors. Advertised supply nationally was 20% below year-ago levels and 36.9% below the five-year average, keeping rental conditions tight across the country.
With the RBA widely expected to begin lifting the cash rate in 2022, home loan repayments for variable-rate borrowers will increase. Read our RBA interest rate forecast for 2022 to understand what economists and major banks were predicting.
What buyers should do
Tight supply in Brisbane and Adelaide means competition is still intense. If you are ready to buy, waiting further could mean paying more. In Sydney and Melbourne, supply has started to normalise, giving buyers more breathing room.
For first home buyers, the record gap between house and unit prices is worth noting. Units offer a more affordable entry point in most capital cities, especially in locations close to work and transport. The price difference is only growing.
Before making any offer, it is important to understand your full purchase costs. Use our stamp duty calculator to estimate the government fees on top of your deposit. At Serres Property Finance, our brokers can help you compare home loans and get pre-approved so you are ready to act when the right property comes up.
Common questions
Q: How much did Australian property prices rise in January 2022?
Dwelling values rose 1.1% in January 2022, bringing the annual increase to 22.4%. That is the biggest 12-month gain since June 1989. A typical Australian property was worth around $131,000 more than it was a year earlier.
Q: Which cities had the strongest property growth in January 2022?
Brisbane and Adelaide led the pace of gains at 2.3% and 2.2% respectively. Sydney, Melbourne, Perth and Darwin recorded softer monthly growth as supply levels in those markets started to recover. Advertised listings in Brisbane and Adelaide remained well below average, keeping competition high.
Q: Are regional areas still growing faster than capital cities?
Yes. Regional Australia recorded 6.3% growth over the three months to January 2022, compared with 2.6% for combined capital cities. Sales in regional markets were 57.9% above the five-year average. Lifestyle regions with commuting links have led growth, and rural areas are increasingly joining the trend.