As first homebuyers slowly withdraw from the market, investors and upgraders are eagerly stepping up to the plate.
Property value growth in Adelaide appears to have cooled in the July quarter with median house price gaining just 1.3% to $382,500. Unit median values also slowed during the same period, gaining just 0.67% to $299,000.
Despite this slower growth as a whole, the market has not experienced similar degree of price falls as seen in other capital cities.
"The Adelaide residential market is performing quite well considering the uncertain economic conditions. Low interest rates have also helped to plug any holes that emerged post GFC and have led to general stabilisation in the marketplace," explains Bart Quinn, WBP Adelaide state manager.
Unit prices have faired well in comparison to more expensive homes due to strong demand from first home buyers adds Quinn.
"Leading up to the 2009-2010 budget we saw a record number of valuation requests for properties at the lower end of the market (sub $300,000) as first time buyers competed for a limited number of affordable homes, particularly units or flats in inner suburbs. However, following the announced extension of the grants, a great deal of the urgency appeared to slowly subside."
The flow on effect from these conditions resulted in an increase in sales volumes of 27% and 13% for homes and units respectively over the June quarter says Quinn. Auction clearance rates in inner suburbs have also improved in recent weeks, and are presently sitting at between 60 -75%, which is up significantly from below 50% earlier in the year.
Kevin Magee, CEO Raine and Horne SA adds that these upbeat data only serve to boost confidence further.
"This year our written sales is same as last year, while it shows no growth, in a tough market, it shows buoyant consumer confidence, thanks to first home buyers and renewed investor confidence," he says.
Investor activity ramps up
Andrew Koukourou Century 21 Central and Aldinga Beach offices says there are strong indications that investors are back in force.
"Investors are now replacing the first homebuyers in terms of the level of inquiry. Those who were holding off when FHBs are active are now slowly making their way back into the market.
"We're seeing a lot of buyers, at the same time vendors have packed themselves up from the market so there's less stock to buy. We're seeing supply shortage of properties around the $300,000 range," he says.
Magee adds that the market is likely to see the last the fhb chasing the remaining stocks in the established market. However, like Koukourou, he's also seeing investors rushing to get back into the market. "Investors are getting back at exponential rate and locking in properties before rate goes up again next year," he says.