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Posted in Real Estate Advice

So, how is our local property market fairing? Observations from the ground (July 2022)

Richard Inwood

So, how is our local property market fairing? Observations from the ground (July 2022);

National property up-date;

CoreLogic’s monthly Market Update shows both houses and units recorded a -0.1% fall in values over May, the first fall since September 2020, as quarterly and annual trends in values continue to weaken.

Its been widely reported in the press recently that the eastern States are experiencing actual price declines, yet Adelaide has bucked the trend somewhat with a 1.3% increase in property prices as a State generalisation.

Local property up-date;

So what am I seeing on the ground? Clearly there are differences between cities and regions and even within regions. Here are the local levers, impacting property demand and prices at play as I am experiencing them;

  1. Interest rates are lifting yet remain at historical levels, even counting for forecast increases – I remember 18% yet we are likely to get to 6% or so by the end of this cycle
  2. Affordability remains a key driver for local property – our homes and properties remain at a significant discount to eastern seaboard prices and potentially represent a wise investment
  3. Livestock and grain prices remain elevated underpinning agricultural returns and the business case for a property purchase
  4. Demand for homes and properties far outweighs availability of homes and properties – I have a data base of people who have either missed out on homes and land or are waiting for the right home or property to come on the market
  5. Buyers are more active in our regions in preference to the Stock Market (or Super Funds) given current market uncertainty – many people with access to funds and finance are currently disinclined to invest in the stock market and instead look at our local properties as a wise and potentially less risky investment

Let me reflect on some recent local activity. In the last few weeks I have listed;

  • Three 80 acres sections – all either under offer or settled at higher than asking price to local Adelaide buyers looking for that quintessential life style block
  • Four building blocks – all contracted or settled with 50% sold to interstate buyers sight unseen
  • Four homes – three under contract with 1 sold to a NZ buyer sight unseen
  • When homes, land and properties arrive on the market, I am typically arranging a transaction in a short period of time

Not a single property I have sold this year (or last year for that matter) has sold below price expectations with majority achieving above or well above expected price outcomes and with a number of sales occurring prior to listing on the internet (off-market).

As a local property summary; I currently see no immediate slow-down in demand for homes, land and properties with prices remaining elevated and at this point I see no reason to change my view for the next few months. Six months from now may see a change and clearly this is too far away to comment on given the litany of geo-political and fiscal uncertainties.

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