Property
Issue No. 45 - Feb/March 2009
Adelaide Residential Market Shows Resilience
by Mr Kel Spencer
South Australia has experienced a slight decrease to previously high recorded growth during the past quarter.
For November 2008, SA saw a 1.4% decrease in building approvals to 3235, with an increase in housing finance commitments of 4.7%, up 192 from October. Nationally, building approvals fell by 12.8%, with an increase of 1.3% in housing finance commitments for the period.
The proportion of family income required to meet average home loan repayments is more affordable in SA than the eastern states. Ours is still the second most affordable state after Tasmania. Supporting SA’s housing market is strong labour market conditions, strong wages growth, the highest annual rate of population growth in 23 years, and low rental vacancies.
South Australia’s strong labour conditions continued well into the first half of 2008 but have recently seen a slight downturn as would be expected given the current economical climate. Employment reached near-record intake levels during October, at 784,000 employees, but during November the number of people entering the workforce had decreased to about 400,000.
The unemployment rate for SA has risen slightly (0.1%)from October to November and currently stands at 5.3%, with the national unemployment rate increasing by 0.1% to 4.5%. Australia’s unemployment rate is expected to reach 5% by the middle of the year, but when these figures are compared to countries such as Britain and the US, with current unemployment rates of 6% and7.2% respectively, Australian labour conditions are considered to be in a stable and healthy position.
Residential sales In the fourth quarter of 2008 the mean metropolitan house price for SA fell slightly (0.7%) to $360,000.
Despite the decrease, metropolitan Adelaide has still seen 1.4% growth in house prices over the past 12 months, as illustrated in Figure1. During the December quarter 2008, there were about 5279 house sale transactions statewide compared with 7806 a...
