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The South Australian Real Estate Market Place.

An historical overview.
This office has always made a point of trying to understand this complex market place. We have been successful with our assertions over the years and our predictions have always been credible and endorsed with fact. We haven’t seen such a sustained strong market place for decades. The Adelaide market will always display a natural note of caution from time to time usually in response to national issues or seasonal adjustments. Official figures show the conservative Adelaide market normally rises slowly and plateaus, rises and plateaus. It is rare for our market place to fall. The drop in median house prices in 1995 and 1996 have been the only annual drops we’ve experienced in 32 years; and they were only 1.76% and 1.35% respectively.

Our current thinking on the Adelaide market place.
(That is the greater metropolitan Adelaide – from Gawler to Willunga).
The Adelaide market place was unusually slow in the first half of 2007 and very active in the second half with the second highest annual rise in the median price in 40 years. Pent-up demand transferred from the first half to the second half of 2007. Similarly the market is shaping up to present us with a strong second half for 2008. Buyers facing higher interest rates and petrol prices retreated in the first half of 2008, however increasing comment of the likelihood interest rates will remain on hold together with the easing of petrol prices, confidence will return for the second half of 2008, however they won’t reach the dizzy heights of 2007. A leading bank economist even suggested in print recently that interest rates will be back to 6% by the end of next year. A leading stock broker suggested banks will be awash with funds by this time next year supporting a substantial drop in interest rates.

It is expected the Adelaide market place will behave in a manner contrary to national trends. The market recognises we have a lot of catching up to do compared with all other capital cities. There is still some accumulated pent up demand from previous years based on official volume of sales figures, complementing the normal current demand. The median price rose $30,000 (20%) in 2002, $45,000 (25%) in 2003, $25,000 (15.5%) in 2004, $16,000 (6%) in 2005, $9,000 (3.2%) in 2006, and a massive $70,000 (24.56%) in 2007 – the equal second highest rise in more than 40 years. So far this year to June 30 the median price has risen $10,000 (3%) on lower volumes which in turn will produce more pent up demand and continue to underpin the market place. The market place will remain a firming sellers’ marketplace. We expect the median price to rise by approximately $15,000 to $25,000 in the second half of 2008.

Our recommendation to buyers: Buy sooner than later and do not fix home variable home loan rates for the foreseeable future.
The economic outlook is the best we’ve seen for decades - S.A. is great.

Good Agency Practice will Prevail