Comments on the current property market:
- More properties coming to market, but still fewer than a year ago.
- Core Logic RP Data reports that the number of properties coming onto the market in Adelaide metropolitan area is down 12% compared to last year.
- This accords well with stats from the SA Lands Titles Office, which reported 13.2% fewer settlements in the October quarter
As you’d expect, with high numbers of people still looking to buy, prices are still rising. This is true for all metropolitan council areas except:
- Gawler (counted as metro): Median price is down 5.2% (87 sales, 1 fewer than last year)
- Mitcham: Median price is down 3.9% (217 sales, 8 fewer than last year)
- Playford: Median price is down 7.4% (296 sales, 31 fewer than last year)
- Walkerville: Median price is down 1.4% (23 sales, 1 more than last year)
Across Adelaide metro, there are currently 7,500 or so residential properties for sale, about 700 fewer than last year (Core Logic RP Data again). So what?
- Demand currently exceeds supply, so we’d expect prices to remain firm.
As you already know, the banks have tightened up on investor loans, with higher interest rates, and lower lending limits. I’m seeing quite a few reports of lenders finding alternative ways around this, to enable investors and developers to continue buying.
Rental managers are telling me they have higher than usual vacancy rates among the rental properties they manage. So their rent estimates (on properties we’re looking to buy for clients) are low.
Put this together with the generally strong buyer demand, and we have:
- Projected rent yields around 4%, instead of the 4.5%-5% we’d like to see.
“It is a comfortable feeling to know that you stand on your own ground. Land is about the only thing that can’t fly away.”