Adelaide surprises with ‘remarkably stable market’
The South Australian capital’s property market appears to have defied the odds across FY23.
In a Year in Review address, Real Estate Institute of South Australia (REISA) CEO Andrea Heading looked back on the year that was – noting that at this time 12 months ago, the state of South Australia had experienced “an unprecedented two-year period of growth”.
Penned within the REISA Viewpoints publication, winter edition 2023, Ms Heading said that at that point in time, the state body had noticed “the initial signs of a slowdown in the Adelaide housing market”.
“Back then, market commentators were quick to predict negative shifts in property prices or a potential ‘hard correction’,” she continued, conceding that the prospect of interest rate hikes and creeping inflation meant their assumptions “were not entirely unreasonable”.
“However, what unfolded over the past year was quite surprising – a remarkably stable market with steady median sales prices and reduced volatility at both ends of the market,” she noted.
Remarking on the persistent stability despite 12 interest rate rises within a 14-month period, she said that the remarkable result can be considered as positive news for current property owners.
Looking to the latter half of the 2023 calendar year, the report remarked that the capital city’s residential property market “continues to exhibit patterns similar to those observed so far this year”.
“While median sale prices have held relatively steady, there has been a slight acceleration in growth, bringing rates closer to the normal pre-pandemic levels,” it continued.
According to the REISA, the positive trend can be attributed, in part, to a record-low number of sales.
But it also cautioned there are indications “of a potential shift in market dynamics” already occurring and set to impact the spring marketplace.
Warning that the 12 interest rate increases implemented up until July 2023 “may have started to force home owners facing mortgage stress to sell their properties”, REISA pointed out that the “relatively inevitable scenario may already be reflected in the available data”.
Therefore, “the number of further rate increases (if any) will have a significant impact on sales volumes as we move into the often-frantic ‘spring selling season’”.
Ms Heading has acknowledged that for many, the continued stability can be considered good news, but she concedes that it also exacerbates “long-standing issues of housing affordability and supply shortages”.
To that end, she raised the work being done by state and federal governments to actively address concerns – as was illustrated by the recent decision-making of the national cabinet.
This has been praised by property leaders in the country as providing a framework to ensure supply can keep up with demand over the coming five years.