Much like December 31, the end of the financial year on June 30 is the perfect time to examine the past and prepare for the future – of your finances, and your real estate goals in particular. Let's dive in for an end of financial year property market update.

Looking back: FY22 End of Financial Year Property Market Update

Property panic

Those home alone because of COVID lockdowns soon found it was a perfect time to save – even if it meant going without holidays and retail therapy – and pop this same cash into a property.

Extraordinarily low interest rates of 0.1% for over 18 months soon became buyers’ BFFs and no wonder.

At the same time, a frenzied 24 months or so of buying led to skyrocketing house prices and supply far outweighing demand.

Regional and rural Australia wasn't immune from the rapid property changes either as city residents fled the suburbs for a quieter life far from COVID lockdowns. The pandemic also brought with it a greater acceptance of working from wherever, whenever.

In CoreLogic’s annual Best of the Best report in 2021, head of research Eliza Owen described 2021 as “a year like no other” with the “extraordinary momentum carrying over from 2020 contributing to an unprecedented year of growth and litany of outstanding results for the Australian residential housing market.”

Key points in this report included:

1. Australia’s estimated residential real estate value reached a record high of $9.4 trillion in November 2021, up from $7.2 trillion a year earlier
2. Sales volumes climbed to an estimated 614,635 – their highest level in almost 18 years
3. National dwelling values increased 22.2% – the highest increase since 1989

Interest rate plunges and spikes

The first half of 2022 has seen a gradual decline in property values as the COVID confusion - and with it, the real estate frenzy - of the last two years finally started to ease.

As life has gradually returned to pre-pandemic “normal”, the Reserve Bank of Australia (RBA) decided to increase the national cash rate in May.

Official interest rates are now 0.85% after the RBA increased the figure by 50 basis points this month with the aim of decreasing inflation to around 2%-3%, rather than the current 5%.

Interest rates are now expected to continue to rise for the remainder of 2022, at least.

However, this big change was hardly unexpected with industry experts predicting the rate hike for months and both buyers and sellers well aware of the outcome of such an increase.

As well, it has been the first interest rate hike in a decade and the current rate of 0.85% is certainly far more attractive than Australia’s record-high figure of 17% in 1989.

Yet even while the market slowly eases, this rising cash rate, along with high inflation, little income growth and an energy crisis, will make buying difficult.

Fixed-rate home loans have already been well on the up for at least a year.

But buying is certainly not impossible and investors can certainly take advantage of the current rental crisis including extremely low vacancy rates.

The same goes for selling – it’s still quite a hot market out there.

As well, COVID and the current property and economic environment have produced a large group of “upgrader” buyers very willing to spend more for a nicer home from which to work and play, says Property Update’s Michael Yardney.

“Now that we have emerged from our COVID cocoons, there is a flight to quality properties and an increased emphasis on liveability … (and) a ‘liveable’ location will play a big part too,” Mr Yardney said.

End of Financial Year Property Market Update. What did we learn from FY22?

If you examine only FY2022 or even just FY2020-FY2022, you’ll see a global pandemic causing major havoc and panic throughout the property market.

These past few years certainly won’t be forgotten in a hurry.

But the glass half-full people that we are at Listing Loop, we firmly believe in looking at the full property picture.

We know from what we've seen across the board that property markets will always rise and fall and come round again – as will crises.

While we're not denying that the last two years have seen some incredibly hard pounding – let’s see who will pound the longest.

We think it will be you.

After all, the average owner-occupier with a 25-30 year mortgage will almost certainly see another crisis in this period, whether it’s a global pandemic or an interest rate plunge.

So, while we don’t wish you to be a pessimist, we do recommend you stay realistic and expect the unexpected – hard-pounding crises included - when it comes to the property market.

Moving forward: FY23 resolutions

Firstly, forget the recent property market dramas for just a moment and return to your main property goals for FY2023.

Then, just as you would if you were selling your property, de-clutter, repaint, repair and refresh these goals – in line with the current property market.

You may want to consider refinancing your loan, researching mortgage brokers further, or reorganising your budget to help you save more.

Then there are the personal aspects of your FY2023 life: are you planning a wedding, new baby or long-awaited travels?

Again, slot these plans into line with the property market as it stands.

But personal or not – ensure you have smart financial budget buffers against rising interest rates and inflation plus the energy crisis now on our doorstep.

We're here to help

If you’re still wrapping your head around our end of financial year property update and are unsure about your FY2023 goals, don’t beat yourself up.

This is big money, big research and big responsibilities we’re talking about and it can be easier to procrastinate on your property goals than get them off the ground.

But we are experts at holding the hands of people just like you with our off-market and pre-market marketplace giving you VIP access to properties so you can always beat others to the property fray.

So, if you're not a member yet, sign up at Listing Loop or download our app.

Sellers, investors and refinancers, we've got your property back too so get in touch with us here.