Buyers returning to real estate market

May 1999

South Australia's real estate market is set for a vibrant 12 months with encouraging trends on pricing and sales volume, newly released State Government figures show.

Department for Administrative and Information Services (DAIS) house sales statistics for the March, 1999, quarter reveal increasing demand among buyers across the State, the President of the Real Estate Institute of South Australia, Mr Trevor Dunsford, said.

The DAIS figures are the official benchmark for the property sector.

Median prices continued their steady rise, improving by 3.7 per cent on the same quarter last year, while the volume of sales remained steady.

In a positive sign for the property sector, there was a greater spread of buyer activity across different areas of the market.

"Since the last week in January, agents have been reporting an increase in home sales in the outer-metropolitan areas," Mr Dunsford said.

"Clearance rates in the metropolitan areas have improved dramatically and provided this trend continues, prices will also continue to increase."

"On top of this, we are now seeing a performance in the market that is consistent across the whole State and not just inner metropolitan Adelaide."

Better-performing local government areas during the March, 1999, quarter included: Burnside (median prices rose 8.6 per cent to $274,600); the coastal areas of Charles Sturt 2 and Holdfast Bay 2, where prices rose by 5 per cent to $132,200 and 25 per cent to $179,200 respectively; Playford 1, (sales volume increased by 22 per cent); Port Adelaide Enfield 1 and 2 (prices rose by an average of 4 per cent) and Mitcham, where prices rose 11.4 per cent to $164,700.

In regional SA, median prices in Mount Barker were up almost 9 per cent to $112,900 and sales volume increased almost 7 per cent; Mount Gambier City (prices increased by 10 per cent to $99,400; Victor Harbor (prices rose by 16 per cent to $120,600 and sales volume increased by 15 per cent); Port Lincoln (prices up by 28.6 per cent to $111,000 and sales volume rose 1.75 per cent) and Murray Bridge (prices rose by 6.5 per cent to $82,500).

The improvement in the market could be attributed to several factors, including a higher level of consumer confidence.

South Australians were also taking advantage of high home affordability levels, the State's employment rates had improved and the rental market remained tight.

The average weekly rental for a three- bedroom house in the Adelaide metropolitan area has increased for the fourth consecutive quarter to $170.29.

"As there are so few rental properties available, people are being forced to look at alternative accommodation options," Mr Dunsford said.

"The logical step is into home ownership as it provides shelter, security and is a long-term investment."

"It is worth remembering that this latest round of sales statistics includes the traditional summer holiday break where buyers are absent from the marketplace."

"Nevertheless, they are encouraging and we are looking forward to the results for the next quarter, which should give us a clear picture of the health of the real estate market."