Issue No. 39 - February/March 2008
First home buyers squeezed out
by Mr Kel Spencer
SA’s Residential Real estate market has been riding the crest of a wave for some time now.
Solid economic progress coupled with strong demand has provided a foundation for property growth that has excelled expectations.
Real Estate Institute of SA data for the September quarter show the Adelaide metropolitan median house price has increased to $320,000.
This represents about 3% growth for the quarter and a rise of 11.5% for the year.
There were about 5000 metropolitan house sale transactions in the quarter and a total of 6893 house sales statewide.
The country median house price decreased by 2.8% for the quarter but increased by 10.2% for the year to stand at $215,000. The state wide median house price is now $291,000. This is a 9.8% increase over the previous 12-month period.
Table 1 demonstrates the growth in Adelaide Metropolitan House prices from September 2002 to September 2007.
Tables 2 and 3 show the median change in house prices in selected city and country council areas for the September quarter and the 12-month period. Many metropolitan LGA’s and several country regions with strong mining associations experienced substantial growth.
Table 4 gives examples of “true” residential returns in selected metropolitan suburbs. These yields have been adjusted to compensate for expenses associated with rental properties such as management fees and maintenance costs.
Although SA continues to have the lowest median house price of all mainland states, the traditional high-price regions of Sydney, Melbourne and Brisbane have increased in median price over the past year at a much slower rate than Adelaide, Darwin and Tasmania.
RESIDENTIAL RENTAL MARKET
Adelaide’s residential vacancy rate has been less than 2% for more than 24 consecutive months, in September the vacancy rate was 1.49%. The historic vacancy rate is 5%.
The rental property shortage has caused a s...