Volume down, but house prices end year with a rise

Feb 1999

1998 was a solid year of growth in South Australia's property market, with good levels of activity and increases  in median house prices across Adelaide as well as several rural areas.

Figures released by the Department for Administrative and Information Services (DAIS) for the December, 1998, quarter show that median house prices across the State increased by 5 per cent, from $106,300 to $109,500, during 1998.

While house values rose during the year, sales volume dropped marginally.

To the end of 1998, the median price of metropolitan houses increased by 4.7 per cent while the inner metropolitan area recorded a 9.6 per cent rise on the previous year's figures.

Real Estate Institute of South Australia (REISA) analysis shows the modest growth in prices across the market has been driven by genuine demand rather than speculative activity.

In Adelaide, median price increases spread from inner metropolitan beachside and middle metropolitan suburbs while the median price of a home in the Adelaide metropolitan area rose from $116,000 to $118,300.

Suburbs with high turnover as well as price increases include: Christies Beach (prices up 4.2 per cent), Golden Grove (up 9.6 per cent), Magill (up 3.2 per cent), Modbury Heights (up 5.3 per cent), Glenelg North (up 5.2 per cent) and Somerton Park (up 17.5 per cent).

House price rises are now more evenly spread and not just confined to the top end of the market, as has been the case throughout early 1998.

Feedback from REISA members confirms a high level of buyer activity in the lead-up to Christmas and it appears that many people are taking advantage of the high home affordability levels and historically low mortgage interest rates.

Meanwhile, Adelaide's rental activity remains strong, with a current vacancy rate of 1.9 per cent the lowest in any capital city.

The average weekly rental for a three-bedroom house in metropolitan Adelaide has increased for the third consecutive quarter to $163.17.

Sales activity and median prices increased by more than the State average in a number of rural areas.

These included: Murray Bridge (up 4.3 per cent); Victor Harbor (up 8.8 per cent); Port Augusta (up 12.6 per cent); Naracoorte (up 24 per cent) and Berri and Barmera (up 9.4 per cent).

REISA predicts that both median house prices and rents will increase throughout 1999.