Adelaide market moving in the right direction

Feb 2001

First home-buyers are leading a statewide recovery in the properly market by taking advantage of the Federal Government's $7,000 First Home Owners Grant scheme which came into effect on July 1 last year.  The scheme, in conjunction with a continuing shortage of properties for sale, has had a positive effect on house prices.  During 2000, 26,644 houses were sold across South Australia, compared with 26,118 in 1999.

The median house value for the State was high in June last year, prior to the introduction of the Goods and Services Tax (GST), and reached $128,100.

There was a record lodgement for settlements as people tried to beat the GST which is payable on new, not established, homes.

The September quarter then saw a decline, to $117,800, as people got GST jitters and held onto their homes.  However, caution didn't last long and by the final December quarter, the median house price had bounced back to $124,500.

REISA President, Barrie Magain, says the Department for Administrative and Information Services (DAIS) house sales statistics for the second half of last year, confirm earlier predictions that the GST would only have a short term impact on the health of the State's property market.

"Confidence returned to the market after just one quarter, proving that last year was very unusual with the combined impact of a new Federal tax regime and the First Home Owners Grant," Mr Magain said.

"These one-off factors influenced the market with a wait and see mentality creating a sales slump in the first instance followed by a rush of first home buyer applications causing a turnaround."

"When you consider that in South Australia, the $7000 First Home Owners Grant can provide a deposit for many purchasers or allow for major improvements to commence, it's little wonder that first home buyers have led the State's property market recovery."

"The figures for the final quarter of last year indicate that the upward trend is set to continue."

Outer northern and southern suburbs in particular are benefiting from the recovery as buyers are taking advantage of being able to purchase their first home as well as being able to afford larger properties.

Some of the better performing suburbs in 2000 include:

• Woodcroft; the median value rose by 11.3 percent to $137,900 on the same time last year.
• Golden Grove; the median value rose by 7.3 percent to $171,700 on the same time last year.
• Wynn Vale; the median value rose by 10 percent to $165,000 on the same time last year.
• Para Hills; the median value rose by 14.3 percent to $104,200 on the same time last year.

Mr Magain said REISA was confident the SA property market would continue to flourish across the board after last year's roller coaster ride and predicted that the turnaround in the last quarter of last year would continue upwards.