The founder and CEO of One Agency has warned real estate professionals to start preparing for a very different and possibly slower market in 2022.

Paul Davies’ forecast, based on numerous indicators, price growth may slow in 2022. Traditionally, first in the capital cities and then the regions, and that days on market, accordingly, would increase. As a result, agents and principals will have to manage an environment with less turnover.

Mr Davies gave five reasons why he expected a slowdown in 2022.

“More stock is reportedly already coming onto the market. That means buyers can be more discerning and won’t have the same fear of missing out (FOMO) they experienced throughout 2021,” he said.

“Finance will become harder to get and more expensive. APRA tightened lending criteria in late 2021 and might do more tightening in 2022. Meanwhile, interest rates are likely to drift higher, continuing a trend that started in late 2021”.

“At the same time, there will be more talk about the Reserve Bank increasing the cash rate. That will be enough to dampen buyer confidence – even if the rate rise fails to occur.”

Mr Davies said the 2022 federal election would also negatively affect the market.

“If there’s one thing I’ve learned during my half-century in real estate, it’s that a lot of buyers suspend their decision-making before and after an election, as they wait to see how things will play out,” he said.