For Australia's property market, 2021 was a record-breaking year. House prices rose by an unprecedented 22.2% year-on-year - that's the highest price increase since 1989, according to CoreLogic. Many experts believe the property market's peak is now behind us, and Australian prices might begin to soften in the lead up to 2023. However, there isn't likely to be a significant downturn, just a slower pace of price growth. It’s no surprise that investors are curious about what lies ahead for Australia’s property market in 2022 and beyond. With that, here’s our real estate forecast for the next five years in Australia. Property prices will continue to rise but at a slower rate Over the past year, property prices nationwide have skyrocketed by over 20%. However, we’re starting to see the market shift as conditions ease and the pace of growth slows. Take these stats from CoreLogic: in the three months to February 2022, national house prices only rose 2.7% (rising by just 1.8% across our capital cities). In February alone, national price growth was down to just 0.3%, with Sydney reporting its first drop in house prices in February (down by a marginal -0.1%). So, what’s driving this slow-down in the pace of price growth? The combination of tighter lending conditions, increasing unaffordability and a rise in housing supply are all taking some of the competitiveness out of the property market. We also know that many buyers are concerned about the threat of rising interest rates, with Australia’s four big banks said to be lifting rates as early as June 2022. Will the property market crash in Australia? As we look ahead, an increase in interest rates is predicted to be one of the biggest property market trends to watch for. In the short term, experts from SQM Research are expecting rising rates to cause a small dip in house prices in the second half of 2022 in Sydney and Melbourne. Some industry experts are predicting a drop in house prices by as much as 14% in 2023 and 2024, depending on how quickly rates rise. But, that would still leave property prices well above pre-pandemic levels. Ultimately, this does offer good opportunities for investors who are looking to get into the market, expand their portfolio or follow a positive cash flow (also known as a positive gearing strategy). Regional property prices will continue to hold value The rise of sea changers and tree changers off the back of the pandemic has sparked what many are calling a “lifestyle movement” in Australian property. We’re seeing high rates of domestic relocation as renters and buyers seek to escape the cities and set up homes in desirable regional spots. We know that regional property price growth has outpaced the national average, rising by an impressive 26.1% in the past 12 months (according to Domain). Plus, net migration to regional postcodes in the December 2021 quarter has more than doubled the levels seen over the past two years prior to the pandemic. Looking forward, regional and outer-city suburbs like the Sunshine Coast, Greater Geelong and Wollongong are tipped to hold value as many CBD workers shift to permanent work-from-home arrangements. The long-term shift in regional property values in Australia will remain a key part of the real estate forecast for the next five years.