Lower interest will let Adelaide property market get off to a flying start

A POTENTIAL interest-rate cut on the back of increased market confidence in the last half of the year should see the 2015 Adelaide property market get off to a flying start, real estate experts say.

29/9/14 - Virginia Beal outside her home in Parkside with her dog Nushka to accompany a story about Parkside being the most searched suburb on Realestate.com. Photo Naomi Jellicoe

A POTENTIAL interest-rate cut on the back of increased market confidence in the last half of the year should see the 2015 Adelaide property market get off to a flying start, real estate experts say.

LJ Hooker SA regional manager Rod Adcock said 2014 saw affordable homeowners taking advantage of record low interest rates and upgrading to middle-market homes.

“The demand for middle- market properties increased prices in this bracket by 6.8 per cent over the year,” Mr Adcock said.

“The upper end of the market also performed strongly, with around a 10 per cent increase in houses priced above $750,000, and the prestige unit market also performed very well.

“There’s been speculation that the next rate movement may be down rather than up on the back of soft economic data released recently.

“If that happens, it will instil confidence, especially among the first homebuyer market.”

Mr Adcock said he believed 2015 would be a strong year for investors, who were increasingly looking outside Sydney and Melbourne for value for money and a fantastic lifestyle.

“By comparison, Adelaide offers significant affordability, and with the rejuvenation of the city centre, a very attractive investment option,” Mr Adcock said.

“I think 2015 will be a strong year in SA real estate.”

Harris Real Estate managing director Phil Harris said Adelaide’s reputation for “steady as she goes’’ would continue into the new year.

“All of the signs are currently there for another good year in Adelaide real estate, with limited supply, shorter days on market and a general consensus among buyers that property prices are back on the move, so it is best to move more quickly than in the past to buy a property,” Mr Harris said.

“Recent statistics forecast the median sale price to conservatively increase by 2 to 4 per cent.

“While we do expect the market to continue to perform reasonably well, sellers will need to be mindful that correct pricing will be critical to getting your property sold to avoid a long, dragged-out sale that can produce a lesser result.”

Ouwens Casserly director Alex Ouwens said he expected interest rates to remain stable or decrease on the back of slowing global hunger for Australian commodities, and that migration and international investment into Australia would increase.

“Both these factors will see various states react differently,” Mr Ouwens said.

“Adelaide prices will remain on a gradual upward incline, which is a very healthy place to be for investors and homeowners avoiding boom or bust symptoms.”

Smallacombe Real Estate managing director David Smallacombe said the recent volatility in the stock market would drive investors back to real estate. “When Sydney has had a boom, Adelaide follows on the next year but a bit more conservatively,” Mr Smallacombe said.

“Sydney has gone up by 50 per cent, so if the interest rates drop again in February then prepare to see Adelaide prices rise.”

CoreLogic RP Data head of research Tim Lawless said Adelaide’s sales numbers had risen over the second half of 2014, and that affordability and higher rental yields than Sydney and Melbourne made Adelaide homes attractive.

“While we aren’t expecting values to surge across Adelaide in 2015, a steady market with values continuing to show a modest rise is the likely outcome,” Mr Lawless said.

“Adelaide has historically been a relatively steady performer — it does not have the same peaks and troughs and volatility in the marketplace that a lot of the larger cities do.

“I think because it does not have the same levels of migration and population growth, it is pretty stable — it hasn’t seen a great deal of overbuilding either.”

Parkside was one of the suburbs identified by Adelaide’s real estate experts as a 2015 hotspot, and resident of five years Dr Virginia Beal said its proximity to shops, the city and the parklands offered a great lifestyle.

“I adore the location,” Dr Beal said.

“I take my dog walking every day around Victoria Park, and there are a lot of funky cafes opening in the area.

“The surrounding suburbs are a little more pricey, so Parkside is the best of both worlds — you get that great location and the same sort of lifestyle at a more affordable price.”

House prices climb as SA market catches up

By Tom Bowden

SOUTH Australian property values continue to rise, with the state’s median house value now at almost $400,000.

According to the Valuer-General’s latest quarterly figures, SA’s median house value rose 4 per cent over the December quarter to $390,000, up from $375,000 in both the previous quarter and the same quarter in 2013.

Adelaide metropolitan house values have risen to $425,000 — up 3.16 per cent for the quarter and 3.91 per cent over the past 12 months. City units and apartments have increased by 1.87 per cent for the quarter and 14.54 per cent for the year to a median value of $400,875.

Real Estate Institute of South Australia president Greg Moulton said the state’s value growth was not surprising.

“Our market is recovering — 4 per cent growth is strong growth for Adelaide,” he said.

“It’s about time our market starting catching up with the rest of the country and having some optimism and confidence.

“I’ve got to give credit to how the State Government has spent its money on infrastructure like the freeways, the ­hospital and Adelaide Oval, combined with our strengthening tourism industry — it’s starting to place Adelaide firmly back on the map.”

Mr Moulton said he expected home value growth to continue for the rest of the year.

Of suburbs and towns that had at least 10 house sales in the quarter, Somerton Park recorded the greatest rise in median value, up 33.06 per cent in the past 12 months to $877,500.

Newton, West Croydon, Henley Beach and Belair all rose more than 20 per cent.

Murray Bridge was the best performing rural city, with its median house value up 17.78 per cent or $40,000 for the year to $265,000. Naracoorte houses also fared well, up $46,000 for the quarter, or 21.65 per cent, and $34,500 for the year to a median value of $258,500.

“The South-East has some of the best farming land and tourism opportunities in the state and I think this area is still very undervalued,” Mr Moulton said.

“I have never understood why Murray Bridge has not taken off more, being so close to the city and with such a great river, so it’s nice to see people are recognising that value.’’

Originally published as Lower interest will let Adelaide property market get off to a flying start