Buying activity in Adelaide is expected to have picked up during the traditional spring selling season and Wayne Johnson, Century 21’s Adelaide-based National Operations Manager, is optimistic that next year will bring with it an improved capital growth performance for the city of churches.
He warns however that, with sales volumes sitting around 15% lower than long-term averages, next year won’t be a record breaker. “It’s fair to say that 2012 should be better than 2011, but it won’t be spectacular,” he says.
A sign of better things to come, says Raine & Horne South Australia CEO Kevin Magee, is that spring is already starting to warm up the Adelaide market.
“We have seen enquiries pick up for the September market, which historically is when the highest percentage of listings come on to the market,” he says.
He does add the caveat, however, that – whereas last time around three times the normal amount of stock came onto the market – this year the numbers will be more conservative.
“We are seeing property come onto the market, although at this stage we’re not seeing a flood,” he says.
“The market as a whole has become quite conservative. People are not looking to do subject to sales. They’re looking to sell their property before buying another one, and to avoid bridging finance.”
He notes, however, that with South Australia’s median prices performing well compared to the national average, there’s every reason for Adelaide’s property market to shake off its confidence woes.
“Pricing in SA has only dropped marginally,” he says, “which would surprise a lot of people watching the national commentary on real estate. It’s not as gloomy as people think it is”.
And if confidence is the main impediment to growth in the South Australian market, then good omens can be taken from the September Westpac Melbourne Institute Index of Consumer Sentiment, which saw an improvement of 8.1% on August’s figure.
Further good news for South Australia comes in the form of recently released August unemployment figures from the ABS, which show that unemployment dropped by 0.1% over the month to hit 5.1%. This positive performance bucked the national trend, as the country’s overall level of unemployment rose by 0.1% to hit 5.3% over the same period.
Magee adds that, with buyers being able to get more bang for their buck in today’s buyer’s market, some attractive country towns that are within striking distance of Adelaide are starting to hit the radar.
He points to Mannum and Strathalbyn in particular, as well as “undiscovered gem” Meadows. While these are traditional retirement areas, Magee believes that investors these outlying country towns are starting to appeal to South Australians who want to be within reach of the city but want a larger property for their money.
“A year or a year and a half ago, if you looked at areas like Strathalbyn and Mannum for investment, people wouldn’t consider them. But with their proximity to the city being about an hour, people are finding that more acceptable,” he says.
“Compared to the cost of inner city or suburban property it’s certainly becoming more attractive to go a little bit further out for a larger property and a country lifestyle.”
And it’s not just owner-occupiers that are heading to the country, he says. Investors are starting to take a long-term view and are realising that the enduring appeal of these towns will see them become more desirable as Adelaide’s urban boundaries start to blur.
“We’re already seeing areas like Stirling, which is a prestigious and comfortable area in the Adelaide Hills, now people are describing it as an eastern suburb. So Adelaide is already jumping boundaries,” he says.