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Mid-year figures suggests property may be heating up

14 Jul 12

Transactions levels in metropolitan Adelaide have shown some signs of recovery signaling that the property market may be starting to bounce back, particularly on the back of interest rates cuts.

Commenting on the release of the official State Government June quarter statistics, the Real Estate Institute of South Australia (REISA) said that the important indicator from this data release is that the sales volume is edging up, showing stronger activity in the market.

“The preliminary data has recorded nearly 3800 sales in the June quarter, and this figure will continue to edge up as data is finalised,” REISA President, Mr Greg Moulton said.

“This is up on the March quarter’s volume and will end up stronger than the same quarter last year.”

“Activity is the really important driver in the property market, so this is a positive change, especially after two recent interest rate cuts.”

The median house price for Adelaide metropolitan areas also rose over the past quarter, further signaling good signs for a stronger property market in the last half of 2012.

“Over the past quarter, the median house price is Adelaide has risen by 3.1%, and we are only looking at a 1.4% decrease on the same time last year, so I think we’re starting to see the end of some really tough times in real estate,” Mr Moulton said.

“It will be a slow recovery as the general economy is weak, but people are starting to think property again, for both investment and a different lifestyle.”

Suburbs which performed particularly strongly, over a 12 month period include Semaphore (40%), Parkside (16%) and Highbury (16%).

“In Semaphore, looking at the sales for the quarter, it’s clear that some big properties have changed hands which has driven the significant spike in median house price, but equally, it shows the demand for the suburb.”

“The market is patchy at the moment, so there’s a bit of volatility quarter to quarter but with activity rising and prices starting to stabilise, we’re heading in the right direction.”

“The amount of stock on the market is still very high, which equals longer time on market. But the flip side for buyers is there are more choices and softer purchase prices.”

“When thinking real estate, it has to be a medium to long-term investment and history will show that you can’t beat the stability and reliability of bricks and mortar.”