What is the outlook for first-time homebuyers in the Australian real estate market in 2022?

A number of factors point to a slowdown in the real estate market, some of which emerged towards the end of 2021, according to EY Oceania senior economist Jonathan McMenamin.

“Increasing [interest] rates is another and a slight easing of customs clearance rates, which have now fallen to 70% nationally, ”said McMenamin.

“What we’re looking for is a situation where the rate of house price increase closely matches the things first-time homebuyers have under their control, such as income growth, seeking to do so.” drop below that 10 percent annualized growth.

“We are starting to see a tightening labor market and, I guess, the lowest unemployment rates of any state, which should put upward pressure on wage growth.”

Geetika Mohindru with her husband Pankaj Kumar and their two children Vyussh Sinha (9 years old) and Viaan Sinha (21 months) in front of their house in Ryde.Credit:Pierre Rae

Aspiring first-time homebuyer Pankaj Kumar is hoping 2022 will be the year he can break into the real estate market, but he’s under no illusions that it will be easier this time around. having missed several times last year.

“I have a lot of hope, otherwise I’ll go crazy. But it’s really hard, not only does it put pressure on you, but it also creates an emotional impact on your family, ”he said.

Mr Kumar added that there was a financial toll on top of the emotional toll, having spent thousands of dollars on contract reviews and building inspections.

It's been a tough year for first-time homebuyers, but it might not be much different at the start of 2022.

It’s been a tough year for first-time homebuyers, but it might not be much different at the start of 2022.Credit:Pierre Rae

“I would say [the market] got worse. the [vendor] the expectation has become higher. It’s a crazy time. Every seller and owner wants to make money. It’s fine to a degree, but for a first-time home buyer it’s completely beyond our reach, ”said the father of two.

Although there are more properties to choose from and agents keep telling him the market has cooled, Mr Kumar said sellers know buyers are “desperate to buy.”


“When there were 10 people who came to the auction, they only see four to six. [buyers]. That’s not to say it’s not a tough race for these people. He’s still there, ”he said.

The tougher lending landscape also impacted its borrowing capacity, narrowly missing a property at the end of 2021 as a result.

“Everything is tight now. I could have bought this last property if the bank had not tightened its guidelines.

“I am hit by at least $ 1,000 every month because of the change in interest rates. “

There is no doubt that taking out a home loan as a first-time home buyer will be more difficult in 2022 compared to the start of last year, according to Mortgage Choice Blaxland, Penrith and Glenmore Park manager Rob Lees .

He attributes this to the change in the sustainability cushion which will see mortgage holders stress tested 3% above their interest rate, down from 2.5%, and higher debt-to-income ratios. strict.

“High borrowing levels can be a problem there and it’s quite different from the start of the year,” Lees said. “[The lending landscape] evolves pretty quickly and for my team we got caught a few times and we can’t guess anymore.

“It’s probably reasonable, so people don’t go above and beyond.

“Banks honor pre-approvals, but once they expire it will have an impact, and their maximum borrowing may well be lower.”