Results released by the Valuer General reveal most suburbs and towns suffered drops in their median house price.

The median metropolitan house price is now $380,500 – 7.2 per cent below the first quarter in 2011 and 2.44 per cent below the December quarter.

Real Estate Institute of South Australia president Greg Moulton said uncertainty about interest rates was deterring buyers.

“It’s really tough out there for vendors looking to sell as prices have eased over the last 12 months and the time taken to sell properties has risen considerably,” he said.

“In the later part of 2011 there was speculation of interest rate drops and the market eagerly awaited this.

“However, when they didn’t eventuate, a lot of buyers held off purchasing and are still waiting to see what the coming months hold.”

However, some suburbs and towns have bucked the trend – Goodwood was the best performer in the city with 10 sales and a median of $844,000, up 37.4 per cent from $615,000 in the March 2011 quarter.

Northgate had 12 sales with the median increasing 22.34 per cent from $470,000 to $575,000 and the West Beach’s 12 sales took the median from $595,000 in 2011 to $717,500, up 20.59 per cent.

In regional areas the median price is $259,000, up 3.6 per cent from the December 2011 quarter, but still down 7.5 per cent on the same time last year.

Mr Moulton said the growth could “signal the end of the toughest times in years for regional housing”.

Nicole Ford, who recently moved from Goodwood to a new house in the same suburb, said she was slightly surprised by the results.

“We’re not Hyde Park or Unley and Goodwood is quite tightly held so I was surprised there were enough sales to have it perform so well,” she said.

“I think the house prices have gone down quite a bit but I think people are more realistic now and about what their house is worth.

“The good ones are still going.”

Cocks Auld Real Estate sales consultant and auctioneer Sharon Gray sold Ms Wood’s house in Goodwood.

`It’s got a wide range of properties from single-fronted cottages right up to properties for more than $1 million,” Ms Gray said.

She urged buyers to make an offer on properties they liked.

Well the big question on everyone’s mind is has the South Australian property market began an upturn with latest statistics showing that home prices across the state increased by 1% over the last month.

This doesn’t come as a huge surprise as out in the market place without doubt we have seen larger numbers of people out looking for property and stock volumes seem to have stabilised. Australia’s largest mortgage broker AFG, reported a 40% increase in national mortgage sales, a very encouraging figure when compared with the previous year which really indicates a great start to the first quarter in 2012.

Nation wide prices
The strong February results, accented by capital gains in Melbourne and Sydney of 1.8% and 0.8% respectively, likely reflect the impact of the November and December Cuts. The Performance of the housing market over the 12 months to last month paints a very different picture. In the nations capital cities, house and unit prices fell a combined 4.4%.

Property prices outside the capital cities have fallen 2.3%.
The only capital city to record an improvement in home values was Canberra, where dwellings registered a 0.4% capital gain.

For last month Darwin recorded a 5% rise in values after many months of declines, and Adelaide’s housing market was showing improvement with values rising 1%.

Hobart prices rose 2.2%. Brisbane’s prices dropped 0.1%, taking losses for the past 12 months to 7.6%, while in Perth values dropped 1.8%

Million dollar suburbs on the decline ( Adelaide bucking the trend )

• Sydney went from 102 suburbs to 92
• Brisbane has 2 retained
• Perth has 14 retained
• Canberra dropped from 3 to 1
• Adelaide increased from 3 to 4
• Melbourne from 28 to 11
• Hobart still does not have a $1 million dollar price tag

The Australian Property investor recently released its list of the top 100 capital growth suburbs Australia wide for 2012 with South Australia having 5 suburbs making the list.
Coming in at #5 was Bowden # 4 Ceduna # 3 Gawler #2 Hackam #1 Magill

Holden Hill outperformed dress-circle suburbs including Golden Grove, Greenwith and Highbury.

The median house price in Holden Hill rose 12.3 per cent on average each year across the past decade, according to RP Data.

Holden Hill’s median house price was $327,500 as of November 2011, up from $102,500 in 2001.

Vista came in second with a growth rate of 10.5 per cent on average each year over the past 10 years.

Brock Harcourts Gold sales consultant Carolyn Vass said Holden Hill was a great investment suburb.

“It once had a stigma attached to it but that is gone now,” Ms Vass said.

“A lot of the old Housing Trust homes have been cleaned up or demolished.”

She said the suburb was especially popular among first-homebuyers eager to snap up a bargain.

“Most of the homes I’ve sold in Holden Hill over the past four years have been to first-homebuyers because it is affordable,” she said.

“I have found a lot of them buy the old houses with a plan to knock them down and subdivide in five or so years when they are ready to move on to something bigger.”

Ray White North East sales executive Chris Gaetjens said development in and across the suburb was responsible for the increase.

“There is something for everybody in Holden Hill; there are units and small affordable homes and there are some more expensive modern homes being built as well,” Mr Gaetjens said.

Forty-six houses were sold in the suburb in 2011 and the median rent was $300 a week.

Hill of dreams
WHEN Colin Johnston bought a 1960s timber house in Holden Hill four years ago, he had no intention of living in it.

“The whole idea was to purchase the property, rent it out for 12 months while I organised to subdivide,” Mr Johnston says.

And that is exactly what the Greenwith resident did.

The two three-bedroom houses on Dundee Ave are now for sale – and Mr Johnston is hoping to make a tidy profit on his investment.

“I paid about $208,000 for the original property and I am hoping to get about $400,000 for each house,’’ he says.

There has been a little bit of interest in the properties so far.’‘

He chose to invest in Holden Hill because it is close to the city and has good public transport.

Mr Johnston is not surprised with Holden Hill’s growth.

“As time goes on the older houses will disappear … it’s already happening,” he says.

Source: Leader Messenger

Houses sold in Renmark, Whyalla and Nuriootpa recorded the strongest capital gains in the state.

Industry experts say the inclusion of five regional SA towns on a list of Australia’s top 100 performing places in 2011 is a product of water returning to the River Murray and the effects of increased mining activity.

The median value of houses in Renmark grew 13.9 per cent in 2011 compared with the previous year, while Whyalla Stuart increased 8.2 per cent, Port Augusta 7.8 per cent, Nuriootpa 6.1 per cent and Kingscote 4.9 per cent.

The figures by RP Data were based on the changes in house values of towns and suburbs that recorded 10 or more sales in the December 2011 quarter.

Elders Riverland branch manager Dave Kanizay said the return of decent water flows to the river had brought a renewed a sense of optimism to the community and the region’s business sector.

“The results are a sign that things are turning around after a lean period,” Mr Kanizay said. “In the previous five years the market bottomed but last year sales picked up again.

“There was a lot of growth in property values outside of the Riverland which we missed, but now with the river flowing and business optimism higher, property values in the area are recovering and catching up.”

The Riverland’s affordability and lifestyle was also attracting new buyers to the area.

“We have a terrific climate, a nice river and you can buy a great property for around $200,000,” Mr Kanizay said.

“Where can you buy a house for that in other regions, let alone Adelaide? Here in the Riverland you can buy a really good three-bedroom home for that money, or for about $400,000 you can buy something with water views or an executive-style home.”

Real Estate Institute of SA president Greg Moulton said BHP’s planned expansion of Olympic Dam had sparked renewed confidence in the Iron Triangle’s property market.

“The fact that mining dollars are about to start flowing after three or four years of talking about it has begun to benefit those places nearby,” he said.

Towns in the Barossa region also were benefiting from significant investment in new infrastructure in Adelaide’s northern suburbs.

“The Northern Expressway would account for Nuriootpa, it makes it very easy to get to – these figures show the State Government’s infrastructure spend out north has flowed all the way to the Barossa,” Mr Moulton said.

He predicted Roxby Downs would feature on this year’s list.

Heather Kennett Rural Affairs Reporter

From: Sunday Mail (SA)

March 03, 2012 10:00PM

Source: AdelaideNow

Rob and Leeanne Gribovskis at their Ferryden Park home, which is for sale.

Picture: James Elsby Source: Sunday Mail (SA)

Prices in Ferryden Park have surged from a median price of $75,000 to $383,000 since 2001.

This represents an increase of almost 18 per cent a year over the past decade, according to real estate analyst RP Data.

The increase is well in excess of the annual 11.5 per cent median price change for Adelaide – from $135,000 to $400,000 – over the same period.

Ferryden Park’s price surge has been generated by the multimillion-dollar Westwood Urban Renewal Project, in which the public housing was replaced by private homes and parks.

Other suburbs north of the city dominated the top 20 list of annual property price rises, with 12 locations compared with six in the south, one each in the east and Adelaide Hills, and one out west.

Brock Harcourts chief executive Greg Moulton said the best-performing suburbs over the past decade were typically priced in the “low-to-mid range”.

“This is because the mid-range market has not been affected by price falls in recent times,” he said.

Mr Moulton said this market was the “most stable” because it was dominated by families with young children.

The Real Estate Institute of SA said Adelaide’s decade-long median house price increase showed “how stable and balanced” the property market was.

“Looking wider than the top performers, nearly every suburb and town has recorded considerable growth, which highlights the strength of bricks and mortar as an investment,” REISA president Greg Nybo said.

“Turning to the regional areas, it’s no surprise that the towns with strong economic activity, particularly around mining, are topping the charts.” RP Data figures show Port Augusta and nearby Stirling North, Whyalla Norrie and Whyalla Jenkins were among the best performers over the past decade.

One Ferryden Park couple was delighted to hear of the suburb’s soaring prices this week, especially as they have their Hassell St house on the market for $409,950 after living there for the past 15 years.

Leeanne and Rob Gribovskis, who are moving to Tasmania for a lifestyle change, said the suburb was unrecognisable compared with when they bought their bungalow in 1996 for $84,000.

“It’s become a lovely suburb with new houses and lots of parks and it’s close to the city,” Mrs Gribovskis said.

“A lot of young families have moved into the area and we’ve been very happy here.”

Source: AdelaideNow

A BankWest study shows 78 per cent of the nation’s local government areas have average house prices well outside the affordability of police, teachers, nurses, fire fighters and ambulance officers.

The bank deems an area unaffordable if the average house price is more than five times the average annual earnings of a worker.

The percentage of capital city council areas seen as unaffordable is up from 75 per cent in 2009, and 70 per cent in 2005.

“These are the essential workers which Australians rely on every day to provide important services and they face the possibility of being priced out of housing in the communities in which they serve,” Bankwest Business chief executive Ian Corfield said.

“This means that many are being forced to rent for longer or buy and face a long commute into work.
“This is particularly evident with the strengthening in the east coast property market in the last 12 months which has stretched affordability for key workers in Sydney and Melbourne.”

The research also shows how difficult it is for all first home buyers in capital cities, he added.

Sydney is the most unaffordable city, with the average house price more than eight times the average annual earnings of a what BankWest calls a “key worker”.

Peppermint Grove in Perth was the most unaffordable council area, followed by Sydney’s Mosman and Woollahra council areas.

Regional areas are much more affordable for the 480,000 Australians working in key community roles, with 65 per cent of council areas deemed affordable, BankWest said.

Tasmania’s Brighton, Sorell and Glenorchy City council areas were in the top five most affordable areas, along with Playford and Salisbury in South Australia.

Source

Bankwest’s Key Worker Housing Affordability report, released today, shows police, teachers, nurses, firefighters and ambulance officers faced prices more than five times their earnings in two-thirds of Adelaide council areas.

Bankwest business chief executive Ian Corfield said the key workers were financially stretched in looking to buy their first home.

“These are the essential workers which South Australians rely on every day to provide important services and they face the possibility of being priced out of housing in the communities in which they serve,” he said.

“This means many are being forced to rent for longer or buy and face a long commute to work. Although we are highlighting how tough going it is for key workers, it reflects the broader affordability issues which affect first-home buyers in Adelaide.” The report also found:

NURSES faced the most difficulties in housing affordability.

AMBULANCE officers were the most likely of the key worker groups to buy a home.

WALKERVILLE was the least affordable council area in SA, where the median house price last year was 10 times the salary of a key worker.

PLAYFORD was the most affordable. The median house price was 4.3 times the salary of a key worker in 2010.

Nurse Bec Pearson, 23, bought a unit in Kings Park late last year with the help of her dad and stepmum.

She said without the help, home ownership would be a distant dream. “It would’ve taken me another few years of saving at least and no doubt I would’ve had to get them (dad and stepmum) to go guarantor still,” she said.

“Other girls at my work who have mortgages on their own say most of their pay goes to the mortgage and they have to work all the penalty shifts to cover their mortgage.”

The Bankwest report comes as new RP Data research shows property sales volumes in Adelaide last year dropped to their lowest in a decade. Analyst Cameron Kusher said affordability constraints were being felt and a lack of first-home buyers and investors was contributing to low sales volumes.

Source

•    The RP Data-Rismark Hedonic Australian Home Value Index – the largest property database in Australia – reported that home prices fell by 0.7 per cent in seasonally adjusted terms in June – the biggest decline in since April 2008.
•    Home prices are up still up 10.5 per cent in June on a year ago – but it is the slowest annual growth rate in eight months.
•    Home prices fell most in Perth (down 1.5 per cent) and Melbourne and Canberra (both down 1.4 per cent).

What does it all mean?
•         The Reserve Bank clearly has another reason to stay on the interest rate sidelines. Home prices slumped in June according to the RP Data-Rismark Hedonic Australian Home Value index. And given that the index has the capability of tracking every property transaction in Australia, the preliminary June results clearly represent a wake-up call.
•         While the APM house price index posted a healthy gain for the June quarter, it suffers from definitional problems much like the Bureau of Statistics survey. The Reserve Bank as well as rating agency Moody’s rely on the RP Data index as the best guide to home price trends.
•         We had always argued that the May rate hike was a step too far. In fact the April move can also be questioned. But it will be important now for the Reserve Bank to stay on the interest rate sidelines to give shell-shocked consumers and home-buyers a chance to catch their breath.
•         It may be the case that interest rate levels are only at “normal” levels. But the pace of rate hikes – the most aggressive tightening cycle in 16 years – clearly has taken its toll.
•         Overall housing market fundamentals are positive. Population growth is still firm, the job market is healthy, housing supply still lags demand in many markets and wealth is at record highs. So this correction still looks more like the ‘pause that refreshes’.
•         Home-buyers and home owners must factor in more normal growth of home prices in 2010/11 around 5-8 per cent. And some markets like Melbourne may face a more protracted period of softness. Provided rates remain on hold until at least late this year, the housing market should experience a soft landing.
•         While the outlook still remains positive, a 0.7 per cent fall in the space of a month is clearly unsettling.

What do the figures show?
House Prices
•         The RP Data-Rismark Hedonic Australian Home Value Index fell by 0.7 per cent in seasonally adjusted terms in June – the biggest monthly fall since April 2008. The monthly growth rate peaked in January at 1.7 per cent and has consistently softened since.
•         House prices fell 0.8 per cent in the month with apartments down 0.5 per cent.
•         Home (dwelling) prices are up 10.5 per cent on a year ago with house prices up 10.2 per cent and apartment prices up 11.4 per cent.
•         The biggest fall in home prices occurred in Perth (down 1.5 per cent), followed by Melbourne and Canberra (both down 1.4 per cent), Darwin (down 1.0 per cent), Brisbane (down 0.8 per cent), Adelaide (down 0.7 per cent)and Sydney (down 0.1 per cent).
•         In all capital cities home prices are higher than a year ago. Leading the way is Melbourne (up 16.0 per cent) followed by Darwin (up 14.3 per cent), Canberra (up 10.6 per cent), Sydney (up 10.4 per cent), Adelaide (up 9.1 per cent), Perth (up 5.1 per cent) and Brisbane (up 4.5 per cent), and

What is the importance of the economic data?
•         The RP Data-Rismark Hedonic Australian Home Value Index is based on Australia’s biggest property database including over 280,000 sales during 2009. Unlike the ABS Index, which excludes terraces, semi-detached homes and apartments, the RP Data-Rismark Hedonic Index includes all properties.
•         The monthly RP Data-Rismark Hedonic Index compares month-to-month index results. Quarterly results are measured comparing end months rather than averaging each month in the quarter. For example, the first quarter of 2009 index results compare the end of March index with the end of December index

What are the implications for interest rates and investors?
•         Investors need to readjust their sights. Double-digit annual growth in home prices is never sustainable – the long-term average is 8 per cent and that’s where prices are headed. In fact prices are likely to overshoot with growth easing to the very low single digits before bottoming.
•         The Reserve Bank now has even more justification to stay on the sidelines. Fortunately inflation has eased, otherwise the RBA would have had a difficult decision – firm inflation and falling home prices is a dangerous combination.
•         The fundamentals for housing are still positive. Nevertheless the sharp drop in home prices in June will reduce the appeal of banks and housing-dependent stocks in the short-term.
 

Source Craig James, Chief Economist, CommSec

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