Adelaide September 2018

The month in review: Adelaide

By Herron Todd White
September 2018

The sun’s coming out of hibernation, footy finals are here and the smell of cut grass fills the air.

It’s September and spring has sprung.

Historically the South Australian property market slows during the second and third quarters. Buying or selling property should be fun and exciting, but the dreary mid-year months don’t lend themselves to this type of atmosphere.

The state government has mapped the quarterly metropolitan house price from June 1998 which, with the exception of notable peaks and troughs, shows slight dips in the median price through the September quarter of the year with an uplift towards December.

Adelaide property 1

It’s noted that the effects of the banking royal commission have begun to be felt through the midportion of the year. The ability to borrow money has tightened. Agents report that purchasers are being priced out of properties that may have fallen into their price bracket 12 months ago. This could cause a doubling down on the September quarter results given the out-of-cycle market pressure. The tightening in lending will not be fully quantified until the results of the December 2018 and March 2019 metropolitan median price growth are revealed.

Agents have reported a slowing in a number of key market indicators leading up to September. Buyer enquiry has reduced while available stock is limited. Discussions with agents in the field indicate the slowing in these key indicators is a seasonal occurrence which forms part of the annual property cycle. For properties going to auction, the winter months can pose a serious threat to the hammer falling. Fence sitting purchasers who are thinking of bidding can be spooked by a simple rain shower or the threat of looming dark clouds. The agent who thought they had ten registered bidders now has five.

Braving the wintry conditions were the vendors of 45 Gray Street, Norwood who began advertising their 3-bedroom, 1-bathroom symmetrical cottage in July with an auction to be held in August. A large crowd braved the cool weather to see the property sell under the hammer for $790,000. Norwood is located approximately 3.5 kilometres east of the Adelaide CBD and consistently rated as South Australia’s most searched suburb.

Adelaide property 2

Suburbs located within the inner and middle rings have been the best performers over the past 12 months. Suburbs located in these rings are considered to be the best prospects for price growth in the December quarter too. This sector provides options aplenty for first home buyers, downsizers, families and developers. Within the inner ring, price pressure can be expected in the $600,000 to $900,000 range whilst the middle ring can expect pressure in the $300,000 to $600,000 range.

Adelaide property 3

Recently advertised in the inner ring is 4 Marian Road, Payneham which comprises a character 4-bedroom, 1-bathroom dwelling on a 1,100 square metre allotment. This property has been listed for sale by auction with an asking price of $800,000. Whilst in the middle ring, 12 Aberfeldy Avenue, Edwardstown comprises a 3-bedroom, 1-bathroom updated 1950s home on a 660 square metre allotment. This property has been listed for sale by auction with an asking price of $439,000. The outer ring continues to struggle with extended days on market with stagnant and in some cases negative growth.

Adelaide property 4

Post-September and moving into the summer months we begin to see an increase in the listings surrounding beach side suburbs and coastal holiday destinations. Coastal tourist towns of Victor Harbor, Pt Elliot and Goolwa south of the city on the Fleurieu Peninsula and Wallaroo, Moonta, Stansbury and Black Point north-west of the city on the Yorke Peninsula swell with holiday makers. This provides the perfect opportunity to promote new listings as the market pool increases. Properties which lend themselves to holiday makers and don’t achieve sale through the spring or summer months can be removed from the market during the middle portion of the year to avoid any perceived over exposure.

Recently sold in the beachside suburb of Hayborough approximately 80 kilometres south of the Adelaide CBD is 8 Olivers Parade. The property provides 6-bedrooms and 3-bathrooms over two levels of living. The dwelling provides unrestricted ocean and beach views and is situated on an allotment of approximately 1,200 square metres. This property was advertised through the winter months before selling for $1.7 million.

Adelaide property 5

Listed for sale approximately 170 kilometres northwest of the Adelaide CBD is 124 Black Point Drive, Black Point. This property comprises a 3-bedroom shack with absolute beach frontage. The property has been listed for sale with an asking price of $785,000. Black Point is considered a blue-ribbon location with those properties situated on the northern side of Black Point Drive being some of the most sought after real estate on the peninsula. This location has historically been tightly held with only a handful of transactions occurring annually. This has changed in recent times with large areas of former reserve land being divided and sold as residential allotments.

Adelaide property 6

Market conditions within these semi-regional and regional costal townships remain stagnant. The remote nature of the Yorke Peninsula creates a more volatile market with increased fluctuations. The increased demand for property on the Fleurieu Peninsula through the summer months results in an increase in settlements at the end of the March quarter as those properties contracted over summer begin to settle.

The data does not lie. The winter months cause the property market to fall into hibernation. As the sun begins to come out and the birds start chirping, vendors, purchasers and agents crawl out of their burrows, give each other a nod and know it’s time. Is spring fever fact or fiction?

I am calling Spring Selling Season a fact.

 

Share

DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.