SQM forecasts drop in Adelaide house prices due to influx of new listings
SQM Research has predicted Adelaide house prices will drop between 2.3% and 4.3% in the next year, due mainly to an increase in the amount of stock on the market.
"Adelaide's stock on market rose by 5.3% during the month of September and 26.7% year on year – a considerable increase. Total amount of stock on the market is currently at 16,618, and if listings continue to flood the Adelaide market we can expect the influx to have a downward pressure on house prices," SQM director Louis Christopher says.
Christopher says nationally there are 382,287 dwellings on the market, which is not good news for sellers, as the market is oversupplied. He says any market turnaround is dependent on the Reserve Bank.
"A lot relies on what the Reserve Bank of Australia decides to do with interest rates," Christopher says.
"If the RBA chooses to raise rates again in 2011 or 2012, property prices will continue to fall in the next calendar year. If they choose to keep interest rates on hold, then this may help stablise property prices and prevent further falls. If they choose to reverse course and cut interest rates this year or next, it is likely that property markets will bottom out, house prices will stabalise and even rise in some cities at the top end of our forecast range.
"At this stage the general consensus is that the RBA will either cut rates by a quarter point by Christmas or keep rates on hold. So it is unlikely we will see rises in interest rates."
Despite SQM's predictions for a falling Adelaide market, its recently released list of the top 10 discounted properties in South Australia shows that the state's vendors are not offering discounts as deep as those in parts of New South Wales or Queensland, with the most discounted property offered at less than 30% off its original asking price.
1
22 Fenton Avenue, Christies Beach, SA, 5165
On the market since: March 6, 2010
Initial asking price: $1.195 million
Current asking price: $845,000
Reduction: 29%
Days on market: 581
2
Lot 12 Hannaford Road, Cudlee Creek, SA, 5232
On the market since: August 7, 2010
Initial asking price: $1.4 million
Current asking price: $995,000
Reduction: 29%
Days on market: 427
3
8 Frederick Street, Port Elliot, SA, 5212
On the market since: December 27, 2010
Initial asking price: $395,000
Current asking price: $285,000
Reduction: 28%
Days on market: 287
4
2 Dulwich Close, Goolwa Beach, SA, 5214 (pictured)
On the market since: Marcy 8, 2009
Initial asking price: $1.1 million
Current asking price: $795,000
Reduction: 28%
Days on market: 946
5
1 Hero Avenue, Middleton, SA, 5213
On the market since: October 18, 2010
Initial asking price: $1.2 million
Current asking price: $870,000
Reduction: 28%
Days on market: 357
6
30 Fairview Road, Hahndorf, SA, 5245
On the market since: May 14, 2011
Initial asking price: $790,000
Current asking price: $575,000
Reduction: 27%
Days on market: 147
7
11 Pyrites Road (via Nairne), Brukunga, SA, 5252
On the market since: May 23, 2010
Initial asking price: $253,000
Current asking price: $185,000
Reduction: 27%
Days on market: 503
8
416/19 Holdfast Promenade, Glenelg, SA, 5045
On the market since: November 13, 2010
Initial asking price: $1.495 million
Current asking price: $1.095 million
Reduction: 27%
Days on market: 329
9
Section 46 Chappel Road, Hindmarsh Island, SA, 5214
On the market since: January 15, 2011
Initial asking price: $460,000
Current asking price: $340,000
Reduction: 26%
Days on market: 266
10
88 Grundy Terrace, Christies Beach, SA, 5165
On the market since: December 18, 2010
Initial asking price: $785,000
Current asking price: $595,000
Reduction: 24%
Days on market: 294
SQM Research also offers a list of the Top 100 Biggest Bargains in Australia for sale.
