The month in review: Adelaide
By Herron Todd White
December, 2009
Our predictions for the residential property market in
2009 were for a year of uncertainty with, (it is fair to say)
a reasonable dose of pessimism. Experts were divided in
their assessment of the severity and likely duration of the
GFC, and there was some cynicism following the Federal
Government providing eligible Australians with a cash
payment.
The South Australian property market has historically
avoided the more extreme fluctuations of our neighbours
to the east and west however, for the early part of the year,
residential property markets languished without any real
purpose. Market activity slowed, selling periods grew
longer and, coupled with optimistic vendor expectations,
there was a mood of uncertainty, which saw a decrease
in the median house price and an increase in rental
vacancy.
The Reserve Bank cut interest rates to a 45 year low in
March to be 3%, and in May the First Home Owner Boost
(FHOB) was extended. The combined effect of these
measures was to boost confidence in the local economy
to a degree and, while the evening news reported
mixed results from stock markets around the world, the
local market steadied showed patchy signs of recovery,
predominantly on the back of ‘first home’ activity. The
upper end residential market was still battered and
bruised (and remains so to some extent). However, the ‘mid’ range market was quite busy as the delineation
between ‘low’ and mid’ price ranges blurred.
In recent months, some optimism has returned to the
market and, while not expecting to pop the champagne
corks just yet, South Australians are definitely returning to
the market as evidenced by increased auction clearance
rates, a reported increase in median values and a ‘busy’ residential rental sector.
In hindsight, our February prediction of uncertainty
was correct. Generally speaking, there has not been the
extent of ‘correction’ predicted by many and the South
Australian property market has remained true to history
by remaining relatively consistent in the national context.
Facing the future, there is a feeling of confidence in the
local market, although a wary eye is being maintained on
the global economic outlook.
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