As conveyancers, there’s nothing we love more than keeping an eye on the trends of the everchanging property market, both within South Australia and across the nation. In today’s environment, it can be hard to keep up as the industry continues to soar in more ways than one.
At the start of 2020, it was easy to read into the doom and gloom surrounding the property industry, and the predictions that house prices could fall considerably. Of course we know now that this was absolutely not the case, with house prices still continuing to increase as we move into the second quarter of 2021.
With a plethora of government incentives on the table, and many people with increased savings due to the lack of international travel in 2020, the market shows no signs of slowing down. Over the past year, the average price has increased by 5.9% nationally, but there’s even better news here in South Australia. In the city, we have seen the combined median house and unit price jump by 7.3% in the last 12 months. Many agents believe this sharp increase is also driven by the fear of missing out, with many buyers willing to offer over and above the asking price in order to secure a property now, rather than keep competing with all the other people trying to get into the market.
Predictions are that we’ll also see strong growth in properties up the higher end of the market this year, with suburbs that have a $3m median price set to double. While none of these suburbs are in SA, perhaps one day we will see some of our most expensive suburbs like Unley Park, Fitzroy and Toorak Gardens making it to the list. It might still be a little way off yet, with their median house prices currently sitting at $1.715m, $1.6m and $1.6m respectively.
Talk of interest rates is never far from the mainstream media, with lots of recent speculation that we may begin to see them rise from their current record low of 0.1%. The good news is, this theory has now been debunked by the Reserve Bank of Australia itself, with RBA governor Robert Lowe confirming that a change to the current rate was unlikely to occur before 2024, as the Australian economy continues to recover from the pandemic. A close, watchful eye will be kept on the lending standards across the country, to ensure banks don’t begin lending “ridiculous amounts” of money as house prices continue to increase.
The number of properties sold each week had a bit of a bumpy journey last year. While it started strong in the first few months, things took a bit of a dive in April, as the coronavirus crisis began to take its toll in Australia. Things began picking up again around mid-year and it hasn’t slowed down since. In March 2021, almost 2,000 more properties were sold when compared to the same week in 2020, and more than 2,500 more than in 2019.
The rental market is an interesting one, and your perspective will likely differ based on whether you are a tenant or a landlord.
For landlords, the market is looking great, with record numbers of enquiries and applications being received for all types of residential properties. This can often lead to offers of higher weekly rental amounts (we saw median rent prices increase by 3.2% in Adelaide last year!), however it is important to ensure that the tenants will actually be able to afford and keep up with the higher payment amounts.
Flipping around to the tenants, this is not such good news as it becomes more competitive than ever to find yourself a suitable place to live, thanks to higher demand and less stock on the market. You will need to make sure you have an impeccable application, with referees who are sure to back you up, in order to put yourself into the pool for consideration.
So, where to next?
With interest rates remaining low and still plenty of buyers out there hungry to get into the market, it’s hard to imagine the market going anywhere but up over the next year. We will continue to keep a watchful eye on the industry and keep our clients up to date.
All statistics sourced from realestate.com.au