SA 2007 Property Outlook: A Steady and Consistent Market

Adelaide will continue to be a consistent performer in the Australian property market in 2007, weathering the storms that will continue to beset some parts of the eastern states, and remaining attractive and affordable for investors and home buyers, First National Real Estate says in its 2007 market outlook report.

“Overall price growth recovery will be driven by on-going strong demand for property in well-located prestige suburbs,” Ray Ellis CEO said. “This is a trend that is clear in most capital cities. What sets Adelaide apart, however, is that it will avoid some of this patchy performance with steady but modest, overall growth. The key drivers will be cashed-up interstate migrants, a solid economic environment, and a median house price that makes Adelaide more affordable than many other cities.”

Mr Ellis said country regions should also continue to hold their own, continuing the trend of 2006 when they matched metropolitan price growth.

“There is a good spread of mining and manufacturing industries and attractive lifestyle destinations that has pushed solid growth in most areas of the State,” he said.

“Although the stand-out performers are centres like Port Augusta, Port Pirie and Whyalla, which are benefiting from the booming mining and manufacturing sectors, there’s also good growth for hobby farms, beachside properties, and for inland towns that offer quality cost affordable housing. This spread of opportunity has helped insulate the State against the drought and the successive rate rises in 2006.”

Mr Ellis said First National Real Estate’s 32 South Australia offices expected the growth in regional areas to continue in 2006, although some areas could be impacted by the drought if autumn and winter rains are poor.

“We think there’ll be sustained buyer interest around the State and in most Adelaide suburbs through 2007, particularly if interest rate increases stay on hold,” he said.

However, housing affordability would become more of an issue for lower-income families, he said.

“Adelaide is better placed than other capitals with regards to affordability but very low rental vacancy rates are putting the pressure on rents and this in turn impacts the ability of potential home buyers to save towards a deposit, he said.

Nationally, First National Real Estate said housing affordability would dominate discussion of the overall housing market.

Price growth in Sydney, Melbourne and Brisbane is likely to be patchy in 2007, Canberra, and Hobart should be steady, while growth will remain solid in Perth and Darwin although down from the peaks of the past two years.

First National Real Estate has 32 offices in South Australia and more than 450 offices around Australia.