Short, sharp, stats & updates on what’s happening in Adelaide’s property market in August 2022
Market in a Minute / Episode 17
Australian home value index dropped -0.2%, recording a second consecutive month of decline this quarter. Eastern capital cities, Melbourne and Sydney can be attributed as the primary drivers of this continued downward trend.
National dwelling values have risen 11.2%, down from a cyclical peak of 22.4% recorded in the last year, further showcasing the continued slowdown in the housing growth rate. Recently, surging inflation and rapidly rising interest rates are contributing to slower market activity across the Australian housing market. As a result, properties are taking longer to sell, with the current median days on the market at 30, up from 28 days in the previous month.
Looking at South Australia in particular, Adelaide has continued to stand out as the nation’s strongest capital city housing market, with housing values up a further 1.3%. It’s likely vendors will continue to see prices rising over the coming months but at a slower pace as interest rates rise and affordability dampens demand nationally.
Looking into the rental market, Adelaide’s rental value outshines other capital cities with a rise of 9.5% in rental rates. Higher rental yields (3.7%) with record levels of overseas migration have further pushed higher rental demand in the Adelaide market.
Turning to finance, after their second August meeting, the RBA delivered an unprecedented third consecutive double interest rate rise, lifting the official cash rate by 50 basis points to 1.85%. 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.
CoreLogic Research Director, Tim Lawless, noted this interest rate hiking cycle may be “short and sharp”, with financial markets and some economic forecasters now factoring in interest rate cuts through the second half of next year.
“When interest rates start to stabilise, or potentially reduce next year, this could be the cue for housing values to find a floor,” Mr Lawless said. “Similar to the trajectory of the upswing, this downswing phase could be a short but sharp one, depending on how high and fast interest rate settings go.”
At Ouwens Casserly, our auction attracted an average attendance of 51 groups and 8 registered buyers per auction. One to highlight was our recent sale of a Georgian-style family home in Crafers, which was sold for $1.6m under the hammer. For the month, we had 2,277 attendees to our open-home inspections.
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.
