While marking the beginning of a new moon, Chinese New Year – also known as Lunar New Year or Spring Festival – is just about to unfold in a few days. This time of the year is very important for Chinese people and countless other people around the world since it is celebrated by over 20% of the world’s population. People welcome good luck into the new year with colourful festivities and traditional customs.
When this vast cultural event takes place, house markets surprisingly gets affected too. Here's an overview of it.
Date: In 2022, the Lunar New Year will commence on February 1st.
Symbol: 2022 is the year of the tiger.
Chinese New Year is one of the most important holidays in China, which is also celebrated in different countries. As the dates are based on the lunar calendar, it changes every year. But generally, it ranges from January 21st to February 20th. This year, the new year celebration will begin on Tuesday, February 1st. As usual, celebrations last up to 16 days. However, the first 7 days are mainly considered a holiday, and it is January 31st–February 6th for 2022.
The zodiac sign for this year is the tiger, which is considered the king of all beasts in China. Tiger resembles strength, bravery, and expelling evils. 12 zodiac animals represent each year of the Chinese calendar. They are – rat, ox, tiger, rabbit, dragon, snake, horse, sheep, monkey, rooster, dog and pig.
Although no one can deny that the last two years have been really challenging for the housing market, fighting against all odds alongside many strategies - ‘a normal scenario’ of the housing market is finally brought to the scene in 2021.
Therefore, with the new year comes new hopes, even for the housing market as well. After all, it is a significant event - when the most enormous migration of people happens. This migration uplifts the demand for real estate, both inside and outside China.
Whilst the official public holiday for the Chinese New Year is seven days, most of the people in China try to make it fifteen days by taking their annual leaves, to enjoy the Lantern Festival with their family and friends.
Spreading far outside mainland China, this festival puts an impact on the housing market in countries with considerable Chinese populations like Malaysia, Indonesia, Singapore, the Philippines, and South Korea.
Not only are the countries of Asia affected, but also countries outside are seen to rejoice it, for instance – Australia, Canada, and more.
With that being said, the traffic and transactions between these countries have been noticeably growing, and it is highly presumed to see growth in 2022 as well.
Chinese New Year is the prime time for property marketers to make deals with potential buyers like Chinese home buyers because they are looking for potential property buying opportunities and investment properties with noteworthy offers.
But the competitive housing marketplace will make it difficult for first-time buyers as homes will continue selling out at a fast pace. Property buyers will need to prepare ahead by having a clear, ideal budget in mind to make decisive decisions when prompted.
Home sellers will also benefit from this due to the rise of housing prices ahead of the new year, even though there will be vital competition amongst them. The reasons behind this competitive market are due to the upgrades in home inventory, demand in the housing market, and convincing price range.
For those who want to rent a house ahead of the 2022 Lunar New Year, the rising home prices and the economy will make a visible impact. Individuals who have migrated find it suitable to rent a house nowadays as the costs of houses continuously rise.
Fun fact: Statistics have shown that home value growth is around 3.5 - 3.8% per year. Ownerly said that the annual average home value growth (or home appreciation) is based on both the local housing market trends and the economy, which causes a certain degree of fluctuation.
Are you a first-time buyer interested to know the home buying process? Read our article here.
Even though it is expected that home prices may drop in 2022, 2021 has shown us that results may defer. The housing markets in 2021 has shown surprising results and home prices have continued to rise over the year in 2021.
Russell Galley, Managing Director at Halifax said that home prices will "maintain their current strong levels" but that growth will be "broadly flat during 2022 - perhaps somewhere in the range of 0% to 2%".
Juwai IQI Group Co-Founder and CEO Kashif Ansari have also said "In many housing markets, home prices will continue to climb, but at a slower pace.".
Realtor.com has also stated that "Home price growth in 2022 to be the slowest in a decade".
Interested to invest in an attractive market this 2022? Let our agents guide you!
One of the most highly searched questions in Google: Is the real estate market going to crash in 2022? Experts say a dramatic crash is highly unlikely. However, we would suggest that instead of trying to time the real estate market, focus on making your move when you're ready financially, and personally! And maybe try reading up whether Omicron will affect the property market too.
The best formula to understand price appreciation would be in percentage. This is the formula to calculate it: change in value / initial cost x 100
The price appreciation formula in words will be to divide the change in value by the initial cost, and then multiply by a hundred. You can find the same results for home price appreciation through this formula too.
First American Deputy Chief Economist Odeta Kushi’s forecasted that home price appreciation will continue into 2022, after a year of rising home prices in 2021.
"This supply-demand imbalance generated the record home price appreciation seen in 2021 and, given this dynamic shows few signs of changing, we expect home price appreciation to remain high in 2022," Kushi stated.
Housing demand depends on consumer confidence. How confident people feel about the future of the economy and the housing market. Because if we anticipate that home prices will rise, housing demand will rise alongside it.
And if home prices rise at a significant speed, a 'housing bubble' (also known as a real estate bubble) will appear. A housing bubble situation appears due to an increase in demand, limited supply and emotional buying. And when speculators notice that housing prices are increasing, they'll dive into that particular hot market, which leads to a further increase in demand - creating a 'housing bubble'.
When the Covid-19 pandemic hit in 2020 and 2021, historically low mortgage rates that were below 3% happened. This is due to the initiatives from the Federal Reserve to help boost the economy.
However, now that people have changed their views from a Covid-19 pandemic to an 'endemic', the economy has now switched into recovery mode. Since then, mortgage interest rates have been steadily rising since their all-time low in January 2021.
You can find your monthly mortgage payment rate by dividing your annual interest rate by 12 (months a year). For example, if your annual interest rate is 2.5%, your monthly mortgage interest rate will be 0.21%!
“Affordability will increasingly be a challenge as interest rates and housing prices rise, but remote work may expand search areas and enable younger buyers to find their first homes sooner than they might have otherwise,”
- Danielle Hale, the Chief Economist of Realtor.com
“Although Chinese buying has still not fully recovered from the pandemic and travel bans, we still expect to see a relative surge in activity after the Chinese [Lunar New Year] holiday.”
- Georg Chmiel, Juwai IQI Group Co-founder
“2022 will bring more balance to the housing market. But don’t expect a buyer’s market; just more selection, less frenzy and slower price growth,”
- Daryl Fairweather, the Chief Economist of Redfin
Well, it seems that this year of the tiger can bring prosperous outcomes for property marketers in this promising housing market - in the foreseeable future.
Wishing you the best of the best new year ahead!
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