Snapshot of the current real estate market
The South Australian property market is stabilizing after several years
of booming house prices and landmark sales. The September quarter
statistics revealed South Australia only had a 0.4% increase in median
house prices, taking the State median to $237,000.
Following the steady growth in the property market over the past
four years, median house prices have consolidated and are levelling
out. The volume of market activity seen in the previous few years
was not sustainable; and it was only a matter of time before it returned
to normal levels.
The metropolitan Adelaide area is a prime example of this stabilization,
with no increase or decrease in the median house price over the past
quarter. The median house price has remained at $260,000 for metropolitan
Adelaide in the September quarter.
However, median house prices still continued to rise over the past
year with several suburbs leading the pack. The suburbs of Hillcrest,
Woodside and Burnside were the stand-outs in the metropolitan area
over the past 12 months to September 2004. They recorded growth rates
of 38.2%, 37.2% and 31.2% respectively. The neighbouring suburbs of
Evanston Park and Gawler East were also strong performers this quarter,
both rising in median house price by over 28%.
Many suburbs that are performing well now often border previous star
suburbs. These latest statistics show how some suburbs, such as Hillcrest
and Woodside, are catching up to their neighbours and smoothing out
an imbalance within regions.
Millicent and Whyalla were the top performers in regional areas
over the past 12 months, while Port Augusta and Murray Bridge also
performed well. They recorded huge growth rates of 57.7%, 48.5%, 40%
and 27.9% respectively. The steady growth in these regional areas
is a key indication of a strong economy and consumer confidence.
The volume of sales across South Australia decreased this quarter,
but this was expected with the market returning to sustainable levels
for the long term.
Tips for homebuyers on setting a deposit
Paying a deposit when purchasing property is a very important part
of the sale process and, as a vendor, due consideration should be
given to setting the deposit amount.
The payment of a deposit is an act of good faith by the purchaser
that he or she intends to be bound by the contract. A contract for
the purchase of property is a legally binding document. A purchaser’s
failure to honour the obligations under that contract will result
in a breach of contract.
Vendors should give consideration to any expenses they might incur
as a result of the purchaser breaching the contract. These costs might
include additional advertising relating to the property being placed
back on the market, bridging finance payments, and the difference
in the original and subsequent selling prices. Even if the deposit
is fully retained by the vendor, he or she might still be able to
take legal action against the purchaser if the loss suffered exceeds
the deposit amount.
Generally, the deposit is 10% of the sale price. However, this amount
is negotiable and, in the case of large property sales, often less
than 10%. As a vendor, you have the right to set the deposit amount.
Prospective purchasers should check the required deposit with the
real estate salesperson before making an offer.
When the deposit is made to the real estate salesperson (on behalf
of the vendor), it is then paid into the trust account of the real
estate office handling the sale of the property. At settlement, the
deposit becomes part of the purchase price.
For buyers considering purchase at an auction, you must be aware
that you are generally required to pay a deposit on the day of the
auction if you are the successful bidder. Therefore, it is important
for you to have discussed the required amount and method of payment
with the salesperson before the auction.
Alternatively, if you are entering into a private treaty contract,
your deposit will be required at the completion of the cooling-off
period.
