Record real estate prices despite shortage

August 2001

South Australian home vendors in all areas of the State are the happy beneficiaries of continued increases in house prices, according to the latest statistics released by the Real Estate Institute of South Australia (REISA).

Across-the-board increases, particularly noticeable in coastal areas, the Mount Barker area and at the extremities of the metropolitan area, have pushed the median price of an Adelaide home to a record high $148,600.

The figure is an increase of $6,600, or 4.65 per cent, on the March median price of $142,000, and represents a jump of 7.37 per cent on the median price in the 12 months since June 2000.

REISA president Barrie Magain said the median increase was recorded despite a small decrease in the number of metropolitan sales in the quarter compared with the same quarter last year 5357 in the three months to June 2001, compared to 5584 in the same period last year.

"Despite the impact of a generally across-the-board shortage of available homes, which led to a small decrease in the number of metropolitan sales, the market is consolidating at the higher levels following the initial GST drop," Mr Magain said.

Across South Australia, 7090 house sales were recorded, with a median price of $136,500. Last year, the median SA price for 7324 sales was $128,000, indicating a rise in 12 months of 6.64 per cent.

Most noticeable were gains in the Mount Barker area, a pocket including Mount Barker itself, Littlehampton, Nairne and Hahndorf. Home owners in that section of the Adelaide Hills have experienced an average increase of 12.93 per cent on the $125,300 median price (to $141,500) recorded 12 months ago.

In northern suburbs such as Ingle Farm and Paralowie, and Morphett Vale and Aberfoyle Park in the south - each of which last quarter recorded median house prices above $100,000 for the first time - prices continued to hover well above that barrier.

At Salisbury East, too, the continued explosion in house prices in the area took the median price to $109,400 - a jump of 5.39 per cent in three months, and an increase of almost 10 per cent (9.40 per cent or $9400) in 12 months

Mr Magain noted that South Australia's love affair with the coast continues to be evident in the prices being paid for beachside properties. At Henley Beach, the median price now stands at $238,500 - an increase of 10.62 per cent on last year while at Seaford Rise the median has risen from $120,000 12 months ago, and $123,300 last quarter, to $129,100.

"Starting with the Holdfast Shores development and rippling along the coast both north and south, South Australian beachside suburbs finally have come into line with their sought-after coastal peers interstate, " Mr Magain said.

"The appeal of the coast is not confined to the city, either. Victor Harbor appears to be the jewel in the rural crown, its one-hour- proximity to Adelaide attracting buyers."

In Victor Harbor, 90 houses were sold in the quarter, with a median price of $158,300 - more than 15 per cent above the median of the last quarter, and a huge 25.63 increase on the June 2000 median of $126, 000.

Mr Magain said the shortage of houses in the metropolitan area also appeared to be affecting the price of home units, and the volume of units sold.

"Because of the shortage of homes available, and the marked increase in the number of people buying for investment and the First Home Buyers Grant bonus - home unit prices have increased significantly in the last 12 months" Mr Magain said.

A year ago, the Department for Administrative and Information Services (DAIS) statistics showed 1541 units were sold in the metropolitan area during the June quarter, with a median price of $98,100.

In comparison, during the three months to June 2001, 1727 units were sold with a median price of $111,100 - an increase in the year of 13.25 per cent.

Based on the June 2001 DAIS figures, Mr Magain noted that other geographical areas in which significant increases in median prices were recorded included:

• Mitcham Council, where the median broke through the $200,000 mark, rising from $185,300 in June 2000 to $211,000 this year, for an increase of 13.87 per cent.
• Golden Grove, where the median now stands at $193,300, compared to $164,000 a year ago - a jump of 17.87 per cent.

Median prices in rural areas have increased marginally in three months, from $97,000 in March to $99,600 today. The rural price represents a 2.06 per cent drop since June 2000, when the median was $101,700.