SOUTH AUSTRALIA OUTLOOK Vendor discounting levels for houses is higher in Adelaide than at this time last year. Property transactions are at their lowest levels in 25 years and well below their five year average at the end of May – a fact which forced the South Australia government to face a ‘record revenue write down’ as a result of reduced property related taxes. This also prompted the government to introduce measures, such as the extension of the first home buyer scheme, to get the state building more houses and people entering the property market. Salisbury and Port Adelaide are the most affordable median house priced suburbs within 20km of Adelaide’s city centre. The key challenges facing local South Australia property markets are: • Vendor price adjustments to meet buyer expectations, due to lower house prices, especially in some parts of the Fleurieu Peninsula • Consumer confidence will improve, especially in the Adelaide Plains and Fleurieu Peninsula regions The most significant factors affecting the state’s property market in the coming six months will be a stable economy, interest rates, lending criteria to secure finance, confidence levels and local business and infrastructure projects. Property hot spots will be where affordability is high within a reasonable commuting distance of the city, particularly with first home buyers and, to a lesser degree, investors. The best performing area for the state should be the Adelaide Plains. The far west of the state is already earmarked as an investor hot spot.
RESIDENTIAL Prices Across the board, property prices in South Australia are expected to remain relatively flat, with some potential falls in land values, particularly in the Adelaide Plains region due to lack of demand, evidenced by the low levels of building approvals. This is a result of low sales volumes, oversupply, and/or lack of demand. At the beginning of June, industry data shows Adelaide was the best performing capital city for the March to June quarter, with dwelling values improving 1.0%. Despite this, dwelling prices remain below the national average at $370,000 (national average $470,000), $385,000 for houses (national average $490,000) and $317,000 for units (national average $430,000).
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FIRST NATIONAL REAL ESTATE 2012 PROPERTY MARKET OUTLOOK – MID YEAR UPDATE