Brighton House Prices & Property Trends Forecast In 2022

A Jewel Of A Suburb

Brighton has long been one of the most desirable places to live in Victoria. Why is that? Here is a non-exhaustive list:

  • It is a great suburb for family living;
  • It is but 11 km. from the CBD;
  • It has great infrastructure and perfect public transport;
  • It has the full range of shops, shopping centres, gourmet restaurants and cozy cafés;
  • It is home to some of the best schools in Melbourne;
  • It has a variety of sports clubs and great sports amenities;
  • It has an appealing mix of both beautiful Edwardian and Victorian homes, as well as beachside designer houses; 
  • Last, but not least – it has a wonderful beach, featuring the notorious and historic Brighton bathing boxes.

Brighton has an area of 8.4 sq. km. Around 7% of its area is taken by the 16 parks of Brighton. The population of the suburb topped 23.000 inhabitants as per the 2016 census. The average age group of the Brighton citizens was 50-59 years of age. These are mostly couples with children who own their houses (73.4% of homes are owner-occupied). The average monthly mortgage payment in the suburb is estimated at AUD 4.000. The majority of the inhabitants are professionals earning AUD 182K+ per year (about 35%), which puts the suburb well above the average for the Bayside area.  

Desirable Destination

Being such a desirable place to live it should come as no surprise that many real estate agencies in Brighton will tell you that house prices have been on the rise for the last decade. At the start of 2022 median house prices in Brighton stand at about AUD 3.800.000 for purchases and AUD 1.100 PW for rent.

The spike in house prices during the past couple of years was not only the result of strong demand due to the good suburb. Government financial support during the pandemic also helped fuel the market. The low bank interest rates yet again reinforced the rising demand, as access to low-interest mortgage loans was easier than ever. The home office spike also transferred some of the attention of future homeowners from units to houses, especially situated in luxurious surroundings (like Brighton).

Brighton real estate saw a 28.6% rise in the median house prices during the last year. This is a much stronger increase than the average price growth for Melbourne, which stands at 14% y/y. 334 properties were sold in the past 12 months. They spent an average of 38 days on the market, prior to sale. 

Outperforming Others

Over the years Melbourne has won the title of “Most Desirable City To Live” the most compared to all cities around the world. Melbourne is currently outperforming all other major cities in Australia, save Sydney. This has been the case for some decades already. For the past 40 years, house prices in Melbourne have increased by an average of 7.9% per year. House prices in Melbourne have outperformed not only the other capitals but the average of them too: 

What is peculiar for Melbourne is that the house price growth is strongly outperforming unit price growth, according to prestige real estate agencies from Brighton. Auction clearances have remained strong even during the trying periods of the lockdowns. Over the past year, online auctions have started to pick up pace as both buyers and sellers are now comfortable with the structure. This may spell resilience in the housing market should future lockdowns occur. This time we will be better prepared.   

The Big Picture

There is a reason for the strong performance of the real estate market in Melbourne. This is the strong Victorian economy. Being resilient as always is coming back from the 2020 restrictions with a national bang. 

The victorian economy is growing at a rate of 5.4% annually – way above all other states. The strong and growing economy suggest rising house prices, which occurred in 2021 for the following year. 

Where Will Prices Go?

Interestingly house prices in Melbourne, rising by 14% y/y, actually lagged behind other capital cities. In early 2022 the heavy lock-downs are already in the past. What may be expected is the pent-up demand to move the house prices further up. Other factors fueling the price growth will be:

  • Improved consumer confidence;
  • Improving economy;
  • Strong job creation.

If we compare Melbourne to other capital cities, its lag in house price increase suggests that there is still strong potential for growth there. Part of this growth is expected to happen in 2022. 

What Are The Bankers Saying?

All bankers are bullish in their 2022 property market evaluations, although expectations are not as steep as the price hike in 2021:

  • Westpac considers the potential for price increase in Melbourne property prices in 2022 to be 8%;
  • ANZ is also expecting a property price increase, but at a slower rate. They anticipate a 6% annual growth in property prices in Melbourne;
  • The Commonwealth Bank also forecasts growth in 2022;
  • CBA also believes that house prices will continue to rise in 2022, eventually leading to an increase in interest rates in 2023 with the job of cooling the market down.

From the end of 2021 and early 2022, a new incentive for house price growth is occurring – inflation. The IMF forecasts a 5.9% annual inflation in 2022. This will trigger two happenings:

  1. Investors will be more eager to invest, rather than sit on cash. This will spell out a fresh increase in house demand and hence house prices;
  2. The continuous rise in home prices and inflation in 2022 is likely to lead to an increase in interest rates by CBA in order to subdue both processes.

Conclusion

House prices in Brighton are set for growth in 2022. Currently, the wind is blowing into the price sail. Check out the reputable real estate agents in Brighton, Victoria. Entry into the market is suggested to be earlier, rather than later. Inflation will have a dual impact on the market in the second half of the year. If the interest rate hike is not able to calm the property market, we may witness higher than expected price growth, as investors will be flocking to save their capital.