Adelaide property market hinges on interest rate decisions: HTW

Local Adelaide agents are reporting continued low levels of stock in city fringe, locations within 10 kilometres of the city and in beachside locations, according to HTW’s February 2017 update.

The valuation firm says demand for quality housing in these areas seems set to continue if lower supply levels prevail.

There is also continuing activity from developers within suburbs that have undergone zoning changes in recent times such as the Campbelltown and Prospect areas.

“The outlook for 2017 will largely hinge on any potential interest rate increases and in the northern suburbs, the upcoming closure of the Holden manufacturing plant,” HTW says.

“Recent media reports have discussed the increasing levels of consumer debt and the high levels of investor activity versus diminishing activity in the first home buyer market segment.

“Future interest rate decisions will further influence these levels of activity.”

The firm also cautions buyers that there is quite a high level of stock available of housing that is less than five years old.

“Quite often a premium is being paid for a new product, when a similar dwelling is available in the same suburb, albeit slightly older.

“There is increasing construction of apartments in the Adelaide CBD and given the relatively stagnant values in this market segment, this type of property should be treated with caution.”

According to HTW, Adelaide is the most affordable mainland capital city on a median house price basis.

It points to ongoing infrastructure projects such as the Torrens to Torrens road upgrade, O-Bahn tunnel works and Darlington upgrades as employment opportunities for the state and improved facilities for the public.

“We would expect some increased activity in the market leading into February,” the report says.

A two bedroom house at 265 Angas Street, Adelaide (above) has been listed for between $560,000 to $580,000.

Similarly a two bedroom unit at 907/39 Grenfell Street, Adelaide (below) has been listed for between $425,000 to $440,000.