South Australia notches a new record despite declining sales

The South Australian property market achieved a record new median price during the December quarter despite a decline in the volume of sales, the Real Estate Institute of South Australia says.

Data from the state’s valuer-general shows South Australia saw a 3.48 per cent rise in its median house price over the previous quarter and a 15.53 per cent increase year-on-year.

Metropolitan Adelaide showed a quarterly increase of 2.13 percent and a year-on-year growth of 11.57 percent.

The volume of sales during the December quarter fell by 7.18 per cent across the state and 6.98 per cent in metropolitan Adelaide.

Andrea Heading, chief executive of REISA, said the results reflect the fact that buyers are still willing to pay strong prices for the right property.

“REISA expected the volume of sales to be lower this quarter, but we are pleased that the median price has once again smashed the record with an increase of 3.48% across South Australia since the last quarter,” Ms Heading said.

“Median prices across South Australia and metropolitan Adelaide once again smashed records at $595,000 and $670,000 respectively.

The drop in sales volumes is “modest”, says Ms Heading.

“While sales across South Australia and metropolitan Adelaide continue to decline, encouraged by continued interest rate rises and general uncertainty in the local and national economic outlook, the modest and declining magnitude of the declines still clearly shows that consumers are entering the market with optimism and confidence. ”

Ms Heading also acknowledged that the recent increases in median prices would mean some buyers would have difficulty entering the market.

“While South Australia continues to stand firm against an uncertain economic environment, it must be remembered that an ever-rising median price is certainly hindering home ownership and affordability,” she said.

“The priority of the South Australian Government must be to ensure an adequate housing stock to meet the needs of sellers and buyers and restore the Australian dream of owning your own home.”

Units defy the downturn

The apartment sector bucked the downward trend in sales activity.

“What was particularly pleasing was the fact that unit and apartment sales were higher than the previous quarter, certainly defying national and local trends,” Ms Heading said.

“Units and apartments across Metropolitan Adelaide also set a new record median price of $465,000 which was up 5.88 per cent on the previous quarter and a fantastic 12.05 per cent on the same quarter last year.”

Cash rate uncertainty leads buyers to put plans on hold

Ms Heading said that the REISA expects a rise in sales volumes when the RBA stops raising the cash rate.

“While the volume of sales was down again, this is entirely attributable to the current economic climate and the significant interest rate increases that have been taking place for several months now,” she said.

“We expect that the volume of sales will really bounce back once the economic situation is resolved, inflation is kept in check and more consumers can confidently enter into a property transaction.”

Suburbs that have seen the greatest growth over a 12-month period (with 10 or more recorded sales
in the current quarter) were Henley Beach (38.74 per cent), Elizabeth North (36.19 per cent) and McClaren Vale (33.48 per cent).