South Australia Outlook The South Australia property market is expected to strengthen in 2011, with house, land and apartment/strata property price increases of up to 5 per cent as a result of ongoing strong demand and increasing stock levels, underpinned by a reasonably strong economy. Assistance programs by major builders together with First Homebuyers Bonus scheme is also adding stimulus to construction and land sales. Vacancy rates are expected to trend downwards in 2011, although may increase marginally by up to 1 per cent in the first half of the year. Weekly rentals are expected to trend upwards as a result of increasing demand due to a booming resources sector and an ongoing lack of investor presence in the market. Movements in weekly rentals will be by up to 5 per cent in the main as investors slowly realise the long term potential and bargains on offer. Investor activity is expected to increase in the region of between 5 and 10 per cent, as confidence in the market continues to grow. Increased mining activity will improve economic and market conditions such as increased job opportunities, stronger demand for housing wealth creation and investment in property. This should see further investment in transport infrastructure for export and provide stimulus in mining and Port regions throughout the state. Property hot spots are seen as redeveloping areas within a 15 km radius of the city, offering affordable opportunities with good rental returns and growth potential. Greenacres in the north/east of Adelaide is an area to watch as well as Glanville and adjacent suburbs in the West. The Proposed re-zoning at Mt Barker will provide for a huge growth of around 7000 dwellings for the area. First National Real Estate members consider that banks should be doing more to help keep the property market healthy and robust in 2011 and should consider: • Abolishing mortgage exit fees which would serve as a stimulus to the South Australian property market. • Keeping their moves on interest rates in line with the RBA rather than move independently. • Reducing loan fees. Two additional interest rate increases are anticipated which, if kept to below 0.5 per cent, should see the market hold up. Recent interest rate increases, together with the ending of the federal and state first home owners grant boost, have already impacted negatively on the property market which would be further exacerbated if future interest rate increases are above 0.5 per cent combined.
20 First National Real Estate 2011 Property Market Outlook