Adelaide’s sellers’ market looks likely to continue throughout spring and into summer, one expert has predicted, as this year’s series of rate cuts, population inflows and the expanded Home Guarantee Scheme bolsters demand.
REA Group senior economist Eleanor Creagh made the prediction as PropTrack’s November Home Price Index, released today, revealed Adelaide combined dwelling prices climbed 1.2 per cent over the past month – the highest in the nation – to an $880,000 median.
This was double the national capital city average monthly growth of 0.6 per cent.
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The growth rate in regional SA, which has been the nation’s standout performer in recent years, has slowed and sat at 0.6 per cent for the month – in line with the national regional average.
REA Group senior economist and report author Eleanor Creagh, said increased borrowing capacities, lower mortgage rates and improving sentiment were fuelling renewed competition, but the pattern of growth was shifting.
“Over the past year, Darwin, Hobart, Melbourne and Sydney have seen the fastest acceleration in annual gains with these previously softer markets regaining momentum,” she said.
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“In contrast, the pace of annual growth is easing from earlier highs in Brisbane, Adelaide and Perth, though prices are still at record levels and continue to rise briskly.
“All regional markets have slowed, except regional Victoria, narrowing regional market outperformance
REA Group senior economist Eleanor Creagh
Adelaide’s house price remains at its record high – up 1.3 per cent for the month to $957,000 – while metropolitan units have increased 0.32 per cent over the past month to $655,000.
Regionally, the median house price sits at $486,000, and the median unit price $423,000.
Over the past five years, metropolitan Adelaide’s combined dwelling price has increased by 91.41 per cent, while regional homes have increased by 96.62 per cent.
Ms Creagh said nationally, annual growth has lifted above the 30-year average, yet stretched affordability was a “handbrake” on growth, which remains well below the 20 to 30 per cent pace of past booms.
“Looking ahead, this year’s series of rate cuts, population inflows and the expanded Home
Guarantee Scheme will continue to bolster demand,” she said.
“With stock on market constrained and new supply challenged, conditions remain tilted toward sellers.
“The market appears set for further price gains throughout spring and into summer.”
Adelaide home values are up. Picture: Supplied by Knight Frank
“With stock on market constrained and new supply challenged, demand-side stimulus will intensify competition.
“The housing market is poised for further gains throughout spring, though the pace will vary across cities as momentum shifts.”
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According to the report, home values in the state’s outback area have increased over the past 12 months by 13.28 per cent to a $347,000 median, while dwellings in the state’s Barossa – Yorke – Mid North region have increased 12.39 per cent to a median of $489,000.
Finder’s head of consumer research Graham Cooke. Picture: Supplied
Graham Cooke, head of consumer research at Finder, said homeowners hoping for a rate cut in November would likely be disappointed, with 30 out of the 35 property experts it surveyed predicting the Reserve Bank of Australia to hold the cash rate at 3.60 per cent when it meets tomorrow.
“This time last month there was plenty of optimism for a rate cut in November – that’s largely evaporated,” he said.
“The RBA wants to see inflation sit somewhere between 2 and 3 per cent, and it just edged above the top threshold.
“The RBA will want to see that number trending down again before relieving any more cash rate pressure.”
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