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Property clock: is your market still on the rise?

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The property market has launched into 2022 with a surprising amount of strength, but it's still widely expected that things will soften significantly as the year goes on. 

Each month, the health and outlook of 50 of the country's top cities and regions are assessed by independent property valuation firm Herron Todd White (HTW) to decide which markets are rising or falling, peaking or bottoming out. 

Given the bumpy road ahead, what does HTW see coming for those top 50 markets in 2022?

Cities at or approaching their peak

HTW's report opens with a bullish sentiment, somewhat playing down the negative impacts of interest rate hikes while suggesting other positive economic factors could continue to push property prices up a bit further. 

That seems to be the basis for what looks like a very optimistic edition of their property clock. 

HTW's property clock for houses in February 2022 looks especially optimistic. Source: Herron Todd White

Looking towards the top end of the clock, HTW has notably placed the Canberra house market right at its peak, suggesting the capital's staggering run of growth could be at an end. 

The NSW Southern Highlands, which CoreLogic just reported as having the highest annual regional house price growth of +38.2 per cent, also finds itself nearing the peak. 

Australia's regional markets have had an incredible run over the past 18 months, but several others have also found themselves towards the top of the property clock. 

In NSW, the Central Coast, Newcastle and Illawarra are some of the key markets tipped to be nearing their peak, as are Geelong and Albury in Victoria.

Cities on the decline or bottoming out

With big banks and economists forecasting a slump in price growth followed by declines in 2023, it may be a surprise to see that HTW has categorised just one market as being in decline right now. 

Canberra is the only unit market tipped to be on the decline from February 2022. Source: Herron Todd White

The Canberra unit market is, according to the report, in the worst shape of all in 2022. 

HTW's Tahleah Williams says "many real estate agents are of the opinion that [Canberra's] growth is not sustainable further into 2022 and the market is yet to cool slightly, an opinion also popular among our local valuers."

Even so, she predicts growth will only plateau rather than falling significantly, so the new high water market for ACT property prices could be here to stay.

Cities on the rise

That leaves the rest of the pack, and given the murky outlook for 2022 that many other forecasters have, it shows the confidence that HTW has in the Australian property market. 

Aside from Canberra, every capital city house market is still graded as 'rising'. 

That not only includes Adelaide and Brisbane, which are currently experiencing a frenzied second wind in terms of price gains, but also Sydney and Melbourne which have eased off considerably in recent months. 

On the units front, Melbourne—which has had a tough time throughout the pandemic—is classed as being in recovery, which may be welcome news to owners around the CBD. 

Some of the hottest regional markets like the Sunshine Coast, Ballina/Byron Bay and Ipswich are tipped for further growth, 

HTW's optimism appears to be partly based on the reopening of the international borders. CEO Gary Brinkworth says "depending on [immigration] numbers, demand for housing could rise and therefore put upward pressure on prices."

Ultimately, he admits that, "while unforeseen external factors can affect the economy at any time, there is good evidence suggesting markets will continue to stabilise in the short term at least."

What's the bottom line for growth in 2022?

While HTW's property clock might seem at odds with some assessments from other agents, economists and commentators, the fact is there are still many unknowns that feed into property growth projections. 

It seems clear that we won't be experiencing the same once-in-a-generation growth that came with the 2021 property boom, but beyond that, it's not easy to accurately predict what comes next. 

A top local agent is the best person to speak to get a genuine read on the conditions in your suburb and to understand how your particular property fits within that market.