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Market Update Metro: 3rd Quarter 2016

1 Nov 16

As traditionally happens every year, the third quarter of 2016 shows a decrease in the volume of sales but the Real Estate Institute of South Australia (REISA) is optimistic for the housing market in the months ahead.

Following the release of the Valuer - General’s median house value data for the 2016 September quarter, REISA President, Mr Alex Ouwens said that the latest figures showed a decrease in the median value since the previous quarter but also showed a respectable 1.25% increase over the same quarter last year.

In the September quarter, 3, 605 houses settled across the Adelaide metropolitan area which is a result that is down on the previous quarter and the same quarter last year. Sales across the entire State were also down for these periods.

“We obviously would have liked to see more sales during the last quarter but this quarter is always a slow period for sales and these figures reflect what happens every year during this time. With a wet, cold, long winter and a federal election, I am confident that spring and summer, along with the continuation of low interest rates, will witness more vendors and purchasers entering the market place this quarter. It certainly is good news that the median price of $435, 000 is still significantly up from the same quarter last year”.

“I have spoken to many senior sales agents in my role as President of REISA and they are all telling me that many clients are waiting until the weather picks up before venturing into the market. I have also heard that many vendors are reluctant to sell – particularly in the downsizing area – because of the exorbitant stamp duties that currently exist in this State. This of course leads to the situation when you have a limited stock supply and fewer people conducting a real estate transaction. We have found ourselves in a long-hold property cycle” Mr Ouwens said.

Suburbs which have seen the largest growth over a 12 month period were Gulfview Heights, Sellicks Beach and Mile End. Other big movers included Elizabeth Park, Brooklyn Park and Glengowrie. Top selling suburbs in terms of recorded sales over the September quarter were the perennial Number 1 Morphett Vale, Flagstaff Hill and Hallett Cove. Other performing suburbs included Paralowie, Aldinga Beach and Woodcroft.

“I am always fascinated to see the list of top growth suburbs compared to the top selling suburbs. The top growth suburbs vary dramatically from quarter to quarter but the top selling suburbs are remarkably consistent. Affordability is the key and when it is complemented by infrastructure and development activity in addition to the potential for investment, then it is no surprise that they remain at the top of the top selling list year after year” Mr Ouwens said.

More broadly, the September quarter statistics showed that South Australia recorded growth of 2.56% compared to the same quarter last year but a 2.44% drop from the previous quarter.

The unit and apartment market showed a 0.30% increase in the median value compared to the same quarter last year but a 5.03% drop from the previous quarter. Sales were down from the previous quarter both in metropolitan Adelaide and across the State.

“I said this last October but again I stress that the winter sales figures must not be looked at in isolation. This quarter is notorious for a big drop in volumes, but we need to look at the continuation of a high median price and the outstanding sales in the top performing suburbs to see that South Australia is a fantastic State for living and investment potential. With the wettest winter in over 60 years, the top end of the market hasn’t listed their homes for sale yet – this is affecting the median price across the State during the last quarter. Watch for it to bounce back! The warmer months and the increase of stock on the market will bring more vendors and purchasers into the market place” Mr Ouwens said.

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