#Unit values jump 15%, Adelaide properties surge 23%

[Howie]

Adelaide leading the charge nationally again.

Unit values jump 15%, Adelaide properties surge 23.89%
http://www.yourmortgage.com.au/news/1930/default.aspx
6/12/2007

Unit prices are rising faster than houses as buyers seek out affordable properties, according to the RP Data-Rismark Hedonic Index report.

Over the past 12 months ending October, unit values jumped by 15.09% to $390,088, compared to houses, which experienced an 11.78% increase to a median price of $475,803.

Tim Lawless, RP Data residential research director, said recent gains on home units have exceeded those on houses in many areas as unit prices catch up. "Previously, house values had been growing faster than units," he said. "It appears that many buyers who previously wanted a house are now settling for home units or townhouses due to the higher degree of affordability these dwellings offer."

The report also showed that the Australian property market is continuing its strong run, with property values rising by 12.58% year-on-year.

Adelaide led the charge, with property values surging 23.89% to $364,824. Brisbane followed closely with a 19.25% jump in values to $410,168. Melbourne property prices surged 18.39%, with houses selling faster than in any other city - just 22 days on average. Lawless noted that this is the lowest average marketing time in any capital city.

Property markets in Perth, Darwin and Canberra saw significant slowdown in growth following their strong run in 2006 and the early part of 2007.

While the Sydney market continued to lag behind other capital cities, it has continued on a sustained but slower pace of growth, adding 7.38% to $511,775, boosted by strong gains in the inner city and metro coastal areas. Lawless pointed out that the Outer Western and South Western suburbs of Sydney and Central Coast areas continued to languish, as many buyers suffered mortgage stress. Demands are also falling, dragging property prices down by more than 10%.

Lawless said Sydney was the most divided market in 2007; however, Melbourne is now showing very similar behaviour, with the affluent areas notching up strong growth while the remainder of the market is relatively flat and in some cases showing negative growth.

[Will]

This is great news for those who already own property, but for those like me this is terrible news. Un-less something serious is done to tackle this, many young people will never be able to own their own home.

[Pistol]

Like Will said, good times to own (like me) but you have to feel for those younger people trying to enter the market. The only thing to do is stretch yourself - you don't want to wait for a couple of years cos it is not going to get any better...

[Pikey]

Agreed, I'm loving that my house that cost us a total of $235,000 to build including land purchase 3 years ago is now worth $440,000, but i'd hate to try and break into the market at the moment. There's no way that I could afford to buy my house at it's value now as a first home owner.

[Cruise]

i bought my first house (house and land package, will be finished in 5 months ) 3 months ago at $183,000, its not that hard to start, you just gotta learn how to save your money and not expect your first house to be a mansion in the best area.

[Howie]

New house and land packages still pretty affordable in the Westwood area which is coming up really nice. I still think there are alot of undervalued areas in Adelaide that aren't in the sticks.

[ynotsfables]

All the ex housing trust areas are the places to keep an eye on now. They will all soon be developed especially those close to the city. Kilburn is a great example, that place is being totaly transformed you might still be lucky to find something affordable there.
I think this is healthy for the market to do this, it cleans older areas up, meaning there is more demand as the city expands.
On an up side i believe this will give home buyers and the government reason to look for a solution to more affordability.

[Pikey]

All the ex housing trust areas are the places to keep an eye on now.

That's what we did!

[Howie]

Foreigners buy into SA
RUSSELL EMMERSON, JOANNA VAUGHAN

December 10, 2007 01:15am

MORE foreigners are buying homes in South Australia than before with residential investment approvals tripling to $300 million in the past three years.

The state's mining and defence boom, which is luring more people, and lower property prices are the main reasons behind the surge.

Foreign Investment Review Board figures show the Japanese are spending the most, with an investment of $552 million (42.5 per cent) across all investment sectors, including residential property in 2005/06.

German investors are second on the list, spending $502 million. They are followed by the Chinese at around $51 million.

Adelaide real estate identity Anthony Toop said he would not be surprised if more foreign investors sought out SA properties.

"There is a real sense across the board that points towards Adelaide as the next spot to go," he said.

"SA could go for a long ride on the mining boom. This, combined with defence spending and the fact that SA is coming off a low base, has made it an attractive market for all investors. I would be surprised if it doesn't triple over the next 12 months again."

Foreign investments made up 3 per cent of the $9.9 billion of SA properties sold in 2005-06. That was up from 1 per cent in 2003-04.

Mr Toop, however, believed foreign investment was not pushing prices beyond the reach of local buyers.

Real Estate Institute SA president Robin Turner said the approvals provided a good measure of SA's attractiveness to a global market. "It is of interest to people in all parts of the world, particularly our Asian neighbours, because of its high stability in every respect," he said. "It is seen as a place in which one can settle with a high level of security."

Mr Turner said speculative investments posed the most danger to the SA market but were weeded out in the FIRB approval process. "If you start getting well-heeled people buying (speculatively) into our market and taking up the supply, it will have disastrous consequences," he said.

[AG]

Hot property for 2008
RUSSELL EMMERSON, REAL ESTATE EDITOR
December 19, 2007 09:30pm
REAL estate agents will look beyond the traditional blue chip suburbs to northern and regional centres next year in their quest for capital growth.

While favourites Malvern, Unley, College Park, Medindie and St Peters were tipped by two of five agents approached by The Advertiser, as boom areas, Adelaide's northern suburbs and regional towns also appear in the list.

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Brock Harcourts chief executive Greg Moulton said South Australia's mining boom and a severe lack of housing would drive up values in Roxby Downs. Whyalla would share the growth, he said.

"It is going to be the gateway for a lot of mining stuff," he said. "They are increasing the length of the runway and I think they will fly more people out to the mines from there."

L J Hooker regional manager Rod Adcock pointed to the value of new developments as a key driver in increasing the value of the northern suburbs.

The $200 million, 700-home Northgate project would drive local property prices, he said.

"It is becoming a bit of an exclusive enclave. It was Housing Trust but with the new development, it is redefining the quality and demographics for that suburb," he said.

The new Northern Expressway, the redevelopment of the Munno Para shopping centre and further land releases similarly would revitalise prices in Elizabeth and Munno Para, he said.

In the inner eastern suburbs, a lack of quality housing stock is expected to frustrate agents and drive up prices, Klemich Real Estate principal Oren Klemich said.

"College Park, Medindie and St Peters are examples of suburbs that we as agents cannot get enough stock in," he said.

"They are close to town, the architecture is generally beautiful and therefore overall you should do very nicely throughout 2008."

Existing demand in Norwood, where the firm recently sold five properties in one week, also is expected to continue.

"Norwood is mixed cottages, villas and townhouses. They are close to town, fabulous for investment because they are good for growth," Mr Klemich said. Port Adelaide also was selected as a growth suburb by L J Hooker's Mr Adcock and Toop & Toop principal Anthony Toop.

While Mr Adock was pointing to the Newport Quays development as pushing up property prices in the area over the next 12 months, Mr Toop took a longer-term view.

"For the most capital growth in close, you have still got to keep an eye on Port Adelaide," he said.

"It is in three to five years, but that will be very big in three to five years."

Mr Toop said he was not picking the suburb because he owned property there because of the future growth.

Valuations fall behind market


RAPIDLY increasing property prices are outstripping valuations and cutting the number of valuation objections, the Real Estate Institute says.
The median value for metropolitan houses was $275,000 at January 1 this year. The median sale price was $20,000 higher at the end of the December, 2006 quarter.

The Valuer-General received only 1904 objections this financial year, compared to 3238 this time last year – a fall of 41 per cent.

Real Estate Institute state president Robin Turner said valuers' reliance on historical data meant valuations were trailing a heated market.

"Valuers must rely on historical data but it is outdated while you are getting rises so quickly," he said.

"A lot of people won't appeal in the times of capital growth – there is every chance your rates will go up, not down. In a heated market there will be a fall in disputes."

Valuer-General Neil Bray said there was little to no lag in valuation of SA properties because they were valued every 12 months. He said the drop in objections was a result of people's growing knowledge of the market as well as steady price growth.

"The movements last year were five to 10 per cent – they had been more in previous years," he said.

"When the increase is bigger, there can be more objections."

Local government remains unaffected by the difference between valuations and market values, the Local Government Association says. Communications director Chris Russell said councils determined their annual budget and allocated to residents based on property valuations.

[Cruise]

Playford North, Watch this space!!!

[AG]

SA housing market 'hottest'
RUSSELL EMMERSON, REAL ESTATE EDITOR
January 02, 2008 07:40pm
ADELAIDE had Australia's hottest property market in 2007, on the back of a strong state economy and increasing interstate interest in affordable property.

The median price for Adelaide houses shot up 23.6 per cent to $388,600 in the 12 months to November, 2007, according to the RP Data-Rismark November Hedonic Indices. Unit prices rose even faster, with a 32.1 per cent increase to $304,100.
The indices rely upon sample data rather than full sales and so are unable to provide suburb-specific data.

Brisbane's property market remained strong as median prices increased by 20.6 per cent in the year to November, but Perth – a city burning with resources fever – barely moved with a 0.4 per cent increase.

Rismark head of research Matthew Hardman described Adelaide's growth as "remarkable".

"If people had been asked to predict that 12 months ago, they would not have said 25 per cent," he said.

Dr Hardman said economic stability was the key to the city's booming property market. "In the 1990s there was high unemployment, but that has come down and there are jobs around," Dr Hardman said.

"We are also seeing increased movement for jobs. People were moving to Sydney but now people are tending to move . . . from Sydney to Queensland, Melbourne, Perth and Adelaide."

[muzzamo]

horraay for irrational exuberance and housing mania...

I just hope that when the Sh*t hits the fan that property prices only flaten, not go backwards as they did in the us...

[AG]

SA house prices boom
RUSSELL EMMERSON, REAL ESTATE EDITOR
January 12, 2008 12:05am
ADELAIDE'S median house price surged almost 19 per cent to $350,000 last year, the biggest jump since the heights of four years ago.

Almost half of the rise occurred in the last three months of 2007, as buyers raced to pick up mainland Australia's most affordable properties in a state with strong economic prospects.
Among the fastest-growing suburbs were Belair (up 65 per cent to $610,000), Tea Tree Gully (up 62 per cent to $358,000) and Onkaparinga Hills (up 55 per cent to $430,000).

The higher prices, however, will create further angst for first-home buyers and low-income earners and cause a further decline in housing affordability.

The figures, from the State Government's Land Services Group, show strong growth is being recorded across Adelaide.

Outer suburban regions such as Onkaparinga in the south and Playford and Port Adelaide in the north also are rising quickly as buyers seek homes that are now seen as relatively affordable.

The statewide median price for houses rose 18.5 per cent to $320,000, while units and apartments jumped 25 per cent to $275,000.

Real Estate Institute SA president Robin Turner said last year "outstanding" increase was comparable to the state's previous property boom four years ago.

"We haven't seen a quarterly rise this big since June, 2003, nor annual growth this significant since March, 2004," he said.

"(That) was a period where there was good activity and had similar conditions to what we have just witnessed. There was far greater demand than supply."

BankSA general manager Chris Ward said optimism about the economy and a growing mining and defence interest in the state had drawn people into the market from interstate.

But an expectation of higher interest rates was expected to peg back house price growth in 2008.

This included BankSA, which yesterday matched ANZ's upper-end 0.2 percentage point rate increase.

"I think there is a lot of conservatism over interest rates and the push of that will be with us for a while as we move into the coming months of mining and defence relocations," Mr Ward said.

Toop&Toop principal Anthony Toop said the December quarter's 7.7 per cent increase was a natural outcome of a shortage of properties for sale.

"As soon as property came on the market, it would sell almost immediately, which kept floating prices because there was no reservoir of stock," he said.

But caution about interest rates was keeping the market under control, Mr Toop said. "It is a boom market but with realistic buying patterns . . . if interest rates weren't going up, we would see leap-frogging in our prices.

"The difference is in the (previous) boom, people went to auction and didn't care about what they paid . . . this is sustainable growth because it is being tempered by interest rates – there is not hysterical purchasing."

The figures reveal the middle price paid, or median sales price, for homes in each suburb for each quarter. It does not mean every house has increased by that same amount.

Median house prices in the outlying areas of Onkaparinga in the south and Playford and Port Adelaide in the north increased between 21 and 26 per cent over the 12 months.

Happy Valley now has a median sales price of $370,000 and Port Adelaide has increased to $360,500.

Mr Turner said prices were rising quickly in these areas as buyers looked for affordable housing further afield. "The outlying areas are sometimes those which are all that are left that is affordable," he said.

"Buyers go there because while prices have risen, they are still significantly less than the inner metro areas.

" . . . it appears to be a good news story but I don't believe it is. It is good for people who own properties already but for those who want to enter the market it is a bad news story."

Shelter SA's executive director, Gary Wilson, said the bad news would not be limited to potential buyers.

"Those who can afford their homes are buying investment properties and they want a decent return on that . . . so they put rents up," he said.

"While rental used to be a step in . . . more and more people will be forced to stay in rentals and will be in housing stress."

The availability of land to build more dwellings remains a key factor to increased affordability, the Housing Industry Association said. Member services chief executive Brenton Gardner said the State Government seemed to be looking at ways to improve the situation.

[DanielC]

I just hope that when the Sh*t hits the fan that property prices only flatten, not go backwards as they did in the us...

It won't happen here in Adelaide, actually I doubt prices will flatten anytime soon either. As the articles mentioned Adelaide is still the cheapest in Australia and the population is always increasing, not even mentioning the mining and defense booms. The way I see it if you can't afford to buy a house now you won't be able to this time next year either.
I'm being optimistic unlike a lot of people, if you read news.com.au property blogs you know what I'm talking about. 40% drop in prices over the next 2 years anyone?