A Letter from Jellis Craig CEO, Nick Dowling
Reflecting on the last twelve months, I feel a sense of gratitude for how the Jellis Craig network has grown and thrived during this challenging period. Looking toward to 2022, I feel a sense of optimism, based not only on our recent performance, but also on my reading of future market trends and indicators that I will outline below.
Despite the difficult conditions of a global pandemic and the accompanying personal, health and economic challenges, Melbourne has experienced one of its best years for residential real estate in decades, both in terms of volume and price growth.
In the first half of 2021, Melbourne’s median house price climbed to just over $1m, up 16% from the same time last year*. By early August, Melbourne’s lockdown meant that the number of properties coming onto the market dropped dramatically. However, having lived through the lockdowns of 2020, we remained confident that residential real estate activity would build during this period rather than dissipate. And, as expected, once restrictions eased in October, there was an explosion in volume and energy in the market. Built up savings combined with low interest rates contributed to this market activity. So too, did the emotional impact of the lockdown and the changed working arrangements which were established. Many people brought forward their life plans and made bold property moves, such as upgrading or buying regionally. I believe this regional shift will continue to be a key feature of 2022.
The Jellis Craig network had a year of outstanding results in 2021. Our market share significantly increased and we’re proud to have sold more than $10b of our clients’ properties over the past 12 months. We also welcomed the Albert Park team to our network, further cementing our position as a dominant player in the premium end of the market.
Property management during a pandemic is always going to be difficult due to the financial stress on both landowners and tenants, as well as government interventions in this space. I couldn’t be more proud of the way our staff maintained their high level of service for our more than 20,000 landlords during this period, always acting with both care and professional concern. As investors return in 2022 and international students come back into the country, there are promising signs for a healthy rental market next year.
In 2022, I believe that price growth in residential real estate will moderate. There are indications that further lending restrictions will be imposed. This, combined with the threat of interest rate rises and the uncertainty created by a federal election, mean that some of the intensity in the current residential property market will likely dissipate. This slight cooling will allow the market to remain more resilient and sustainable over the long term. I believe that the premium market will remain strong, as will regional growth. With our premium Melbourne network and our key lifestyle offices in places such as Sorrento, Daylesford and Woodend, Jellis Craig is well placed to take advantage of these trends.
Thank you to our clients for your trust and support during this challenging year. I wish you all the very best for a wonderful festive season and look forward to working with you throughout the course of 2022.