What affect will rising interest rates and limited supply have on property prices in south Australia? We chat to property expert Georgie Todd from Harris Real Estate to find out.
Despite news of property prices falling nationally, the South Australian market has so far been resilient – why is this?
Adelaide has seen an average of more than 24 percent growth over the last year alone. The unique thing about the Adelaide property market is that whilst rates are increasing there is also 15 percent less properties on the market, compared to the five-year average. This limited supply means our property values are likely going to be protected by competition, which is why we won’t seethe heavy decline seen in other states.
Yes, we have seen a slight easing in property prices lately, but these changes seem to reflect a normalisation rather than a correction. The new normal. If your property is priced fairly there are still plenty of buyers at this new established price point, reflecting an SA market that has been and always is quite resilient.
So, climbing interest rates are an influencing factor when it comes to the strength of the housing market, but, so too is supply and demand…
We will likely see interest rates continue to rise until we level out, it’s predicted this will be somewhere around the five percent mark.
What impact will the release of the recent Federal Budget and increased costs of living have on local house prices?
Increased cost of living will impact on the savings and borrowing capacity for many families. This may see some buyers looking to purchase at a lower price bracket than what they had originally been searching. Therefore, the impact might be on buyers and their expectations but not necessarily on house prices. It will therefore be crucial for sellers to be engaging experienced agents who can express and defend the value of their property price to buyers and, likewise take this same time to help some buyers transition through this phase. Homeowners looking to sell can still feel confident that their property prices will be protected because our incredibly low supply of property on the market always underpins fair market value for properties here in Adelaide.
Do any of these market changes have an impact on recommended sales strategies?
Sales strategies fluctuate in any market. Choosing a method of sale, in my opinion, should be based on many variables including property type, price point, area and local auction clearance rates. There is never one method that suits all properties at all times, it’s always assessed on a case-by-case basis.
What are the predicted housing trends for 2023?
It is likely that we are about to enter a sustained period of limited growth due to the fact that for 10 years prior to the COVID property boom, the Adelaide market only ever went up by 1.9 percent year on year.
Should people looking to buy or sell be cautious?
The Adelaide market is one of the most stable and resilient property markets in the country and it always has been, so I don’t believe that SA buyers or sellers should be too cautious. I think where we are now is back to a normalised Adelaide market, which is as good a time as any to buy provided you are sensible and that you are playing the medium to long term game.
Georgie Todd
Property Consultant
0420 492 936
georgie@harrisre.com.au
@georgie_todd_realestate
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