Your Real Estate Market Insight / Quarterly Market Report October 2022

Welcome to your market insight, everything you need to know about the South Australian real estate market!

Here is your snapshot of how the Adelaide real estate market has performed over the past quarter and some expert advice to help you on your property journey.

Take a look at our report below.


Market in a Minute

Short, sharp, stats & updates on what’s happening in Adelaide’s property market. Episode 19 – October 2022 

As spring selling season has sprung, national dwelling value has increased by 4.7%, a decline from the cyclical peak of 22.4% recorded during the last year’s covid growth phase. A combination of soaring inflation, rapidly rising interest rates, and a seasonal slowdown is contributing to slower housing market activity this quarter. 

Over the month, the Australian home value index dropped 1.6%, the biggest decline since 1983. Almost all estate markets are currently experiencing a housing downturn, (except regional South Australia). As a result, total stock levels are 0.1% below the five-year average and properties are taking longer to sell, with the median days on market increasing to 33 days from 28 days in the previous quarter.

Despite the recent slowdown, housing values across most regions remain significantly above the pre-pandemic levels. Thus, total listings are gradually increasing but still remain well below the average for this time of the year.  

Looking at South Australia in particular, Adelaide Housing has been more resilient to falls than most regions, but values are now succumbing to the downward pressure of higher interest rates and affordability, slipping 0.1% lower in August. 

In the last quarter, Adelaide’s dwelling values increased by almost 1.6%. Even though the housing values have flattened out, Adelaide’s relatively affordable housing stock and positive migration continue to demonstrate strong buyer demand, with home sales up 21% over last year and 45% above five-year average levels. 

Looking into the rental market, rents have bucked the downward trend, with the national rental index rising 0.8%. Adelaide’s rental market continues to outperform other capital cities by 12% in rental rates and 3.8% in rental yields, with tight rental markets, improving rental yields and stronger buying conditions.

Turning to finance, the RBA has raised the official cash rate to 2.60% over the past quarter. RBA governor Philip Lowe said, “The increase in interest rates over recent months has been required to bring inflation back to target and to create a more sustainable balance of demand and supply in the Australian economy,” reflecting the fast pace rate hikes. 

“Rising inflation, higher interest rates and falling real wages all set the scene,” said Jim Chalmers, Treasurer, highlighting the sheer uncertainty associated with inflation, wages, growth and monetary policy. 

According to economists, the US Federal Reserve’s actions are expected to influence the RBA, predicting early signs of relief in supply and demand pressures in the economy. In the US, a build-up in inventory is seeing retailers mark down the cost of some goods, while global input and commodity prices have also started to ease. 

Money markets are indicating a lower peak in the cash rate than originally anticipated a few months ago. CoreLogic Research Director, Tim Lawless, noted this interest rate hiking cycle may be “short and sharp”, with CBA having suggested RBA cash rate cuts could be in store as early as next year. If these trends in easing inflation begin to manifest more widely, it could signal a floor for the Australian housing market decline as early as 2023. 

If you are looking to buy, sell, lease or have your property managed, reach out to one of our specialist property consultants here within the OC team.


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