With the start of the spring selling market fast approaching, the Adelaide market is clicking into gear.
“Across Adelaide, many markets are starting to fire on all cylinders,” said James Trimble, General Manager, Raine & Horne. “In the autumn there was a shortage of properties for sale due to the confusion about a possible change of Federal Government in May’s election, which is now behind us.
“Subsequently, our transactional volumes were softer for June but have now picked up in response to stronger buyer demand fuelled by political certainty, two winter interest rate cuts and the decision by APRA to recommend the removal of the 7% buffer on mortgage serviceability assessments.”
The removal of the borrowing buffer could enable a first home buyer with no dependents and a salary of $80,000 to borrow an extra $54,000, according to research from Our Broker.
Since June, our South Australian offices are reporting faster transactions with some Adelaide properties selling above vendor expectations, according to James. “Given employment is holding steady and buyer demand is picking up, we are expecting relatively robust activity in the third and fourth quarters of 2019.
“Once we leave behind the winter months, where many properties don’t always present at their most advantageous, we expect good conditions from September, especially for entry-level markets. Lower lending buffers will also encourage more first-timers to borrow.”
James nominated the metropolitan suburbs between the city’s sandy beaches and the foothills of the Adelaide Hills as markets to watch. “We expect good price growth for these markets and especially for properties priced between $300,000- $800,000,” he said. “At $300,000, you can buy a well, presented two-bedroom apartment in some metropolitan suburbs with a rental yield of 5%.
“For $800,000, you’ll get a pleasant three-bedroom bungalow in Kurralta Park.”