Growing or slowing? 2022 survey has two scenarios dividing property experts

A new survey shows experts are split on the outlook for home sales in 2022. And, it all depends on which side yields first - the once-enthusiastic buyers or the once-cautious sellers.

Residz Team 2 min read

New U.S. research shows two possible scenarios dividing property experts in 2022.

Scenario 1:

A slowdown. Buyers who’ve forged on despite the record-fast price rises may start to baulk at unaffordable prices, and sales will wither. 41% of property experts predict this scenario.

Scenario 2:

Sales will grow. Homeowners, once reluctant to sell, start selling en masse, causing a sales bonanza. 41% of property experts predict this scenario.

A further 18% believe sales will remain roughly the same, according to the latest Zillow Home Price Expectations Survey (ZHPES).

Zillow’s senior economist Jeff Tucker said in his January press release the outlook for home sales in 2022 depends on which side yields first - the once-enthusiastic buyers or the once-cautious sellers.

“Panelists who foresee lower sales in 2022 point to financial strains on buyers as the main driving factors,” he said. “Worsening home affordability was cited by 54% of respondents as the most important reason for a sales decline, while higher mortgage rates were noted by 28%”.

This will also be impacted by the re-starting of immigration into Australia which has stalled this last two years due to COVID.

Those who predict an uptick in sales put it down simply to more homes being available for sale.

“51% said an increase in existing homes listed for sale will be the most important factor,” he said, "while 21% pointed to more new homes being completed and listed for sale".

While the research is based out of the U.S. Australia is similarly placed to see either scenario play out. However, one factor is starkly different. Australia may not be getting the new homes it needs to meet demand. Supply chain difficulties and shortages are one factor, so too are the number of planning approvals. According to Broker News, planning approvals for new homes in NSW have dropped alarmingly last year from 3,700 a month in September to only 900 in November.  

It quotes Tom Forrest, CEO of UrbanTaskforce as saying “If you’ve got a drop off in planning approvals, it doesn’t mean that you’ll have a shortage in supply tomorrow, but what it does mean is that you will in a couple of years, when those approvals would have resulted in the building of new homes.”

This marries with Zillow’s survey, where every respondent said that while price rises may slow in 2022, the average of their long-term projections remains among the most bullish outlooks for home values in ZHPES history.

On average, U.S. survey respondents expect home values to grow another 6.6% this year, and by 23.5% over the coming five years.

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