A snapshot of the SA property market
House prices and trends
The recent release of quarterly statistics shows once again the stability
of the South Australian property market.
South Australia has now had 15 consecutive quarters of growth in
the median house price. The state median price for a house in SA is
now $235,600 with the metropolitan median being $258,000.
The Adelaide metropolitan property market has been a solid performer
over the past 12 months, recording growth of more than 17 per cent
for the year and 3.2 per cent for the quarter.
Before the release of these official State Government statistics,
there was much speculation that the property market had cooled, but
this growth in housing prices coupled with a steady volume of sales
dismisses that perception.
Although sales volume is down from this time last year, this market
correction was expected, as the market has been gradually stabilizing
to sustainable levels. The volumes of the previous years were phenomenal
and the sales volume in this quarter marries up with levels seen in
previous years, when the market has been in a steady and stable phase.
The outer suburbs continued to be the star performers this quarter
with Gawler South, Gulfview Heights and Sellicks Beach recording the
highest growth over the past 12 months to June 2004. They recorded
growth rates of 57.6 per cent, 46.1 per cent and 37.5 per cent respectively.
Trends indicate that the suburbs that have risen in value considerably
neighbour previous strong performers. This is a pattern often seen
in property cycles.
In country areas, growth was equally as strong, with price increases
of 20 per cent for the regional areas over the past year. The rural
areas of South Australia now have a median price of $168,000 with
volume still strong and steady.
Several key towns in rural South Australia have really taken off
in the past 12 months. Millicent’s median house price grew by more
than 37 per cent for the year. This is attributed to the healthy state
of the economy in SA’s south-east. It is also complemented by Mount
Gambier’s price growth in previous years flowing on to the next major
town.
Murray Bridge has also experienced particularly strong growth in
house prices over the past year, rising by 39 per cent. Anecdotal
evidence suggests Murray Bridge prices have been strengthened by the
completion of the Heysen Tunnels in recent years and the popularity
of country living for some people with the option still to commute
to the city daily.
What about first homebuyers in the market?
There has been considerable debate in recent times about first homeowners
in the local market and whether homeownership is slipping out of reach
for some people. The level of first homebuyers in South Australian
has decreased steadily over the past three years.
According to the latest available statistics on first homebuyers
in South Australia, the percentage of first homebuyers in the market
is at a 10-year low (13 per cent). In 2002-03, 9,858 new homebuyers
entered the state market. This was down 35 per cent on 2001-2002’s
total of 15,176. The Commonwealth Government’s increased grant during
this time boosted levels, but 13 per cent of market share is still
down on the levels of the 1990s of 15 per cent.
The recent release of the Productivity Commission’s Report into
First Home Ownership clearly outlines the challenges that must
be overcome to ensure that housing in Australia stays affordable.
Rates of property taxation in SA featured in the report’s findings
and recommendations.
The stamp duty on a property purchased for $250,000 is nearly $9,000.
The recent state budget offered only modest relief from stamp duty
and mortgage duty for first homebuyers.
For the purchase of a $250,000 property, a first-home buyer can secure
only a $15 concession from stamp duty and $777 relief in mortgage
duty. If the property exceeds this amount, there are no exemptions.
The report recommended that stamp duty levels be considered in the
2005 review of the Intergovernmental Agreement, which was entered
into between the Federal and State Governments as part of A New
Tax System.
Moreover, the report suggested that if resolution on this important
matter was not reached during this review, a forum should be held
to give the matter appropriate consideration.
REISA looks forward to further community debate on this issue and
will continue to play an active role in the campaign for lower property
taxation.
