House prices in South Australia continue to grow

1 May 2004

The South Australian property market has defied speculation of a downturn with median house prices rising by more than $5,000 over the three months to the end of March.

“This steady growth in the property market demonstrates the stability of the market in South Australia and defies speculation that house prices would fall,” Real Estate Institute of South Australia Chief Executive Officer, Ms Joyce Woody said.

The median house price for metropolitan Adelaide is now $250,000, an increase of $5,000 on the previous quarter.

Over the past twelve months, we have seen the median house price for metropolitan Adelaide rise by nearly $50,000. In the first quarter of 2003, the median was $202,000.

The outer suburbs continued to be the star performers this quarter with Gulfview Heights, Highbury and McLaren Vale recording the highest growth over the past twelve months to March 2004. They recorded growth rates of 79%, 51% and 47% respectively.

“The outer suburbs are continuing to experience price rises as demand in these areas remains steady,” Ms Woody said.

The central metropolitan area and inner metro area prices medians have levelled however there are still some standout suburbs - Fullarton (42%), South Plympton (36%) and Klemzig (31%).

Some beachside suburbs have also continued to punch above their weight with Henley Beach (36%), West Lakes (35%), Largs North (32%), Grange (29%) and Aldinga Beach (26%) all exceeding the average metropolitan gain for the past twelve months (23.7%).

Comparing sales volume to the same quarter for 2003 reveals that there has been a levelling in the market which was expected.

“The demand for property over the past three years has been phenomenal, but it was not sustainable and we expected this correction in the market,” Ms Woody said.

This preliminary data suggests that around 1000 fewer houses were sold in the March quarter of 2004 compared with the December quarter of 2003, however this is only preliminary data and we anticipate that the final data will reveal volumes have only dropped by around 10% over the past quarter.

The South Australian property market is healthy and a good market for both buyers and sellers.