REISA President Alex Ouwens said the results were not surprising given the third quarter is a traditionally slow period for sales. The figures showed a slight decrease in the median price from the previous quarter but also showed a 2.27% increase over the same quarter last year.
In the September quarter, 4,028 houses settled across the Adelaide metropolitan area which is down on the previous quarter and just down from the same quarter last year. Sales across the entire State were also down for both these periods.
“It is always disappointing to see a decline in the volume of sales as it means that home owners are feeling increasingly immobile due to paying the highest stamp duty in the nation,” Mr Ouwens said.
“Stamp duty is a “monster” tax that traps people in homes that are a poor fit for the size of their families. In Adelaide stamp duty for the average house is about $25,000. First homebuyers – even after saving an average of eight years for a deposit – need to find another $25,000. One third of the costs of a new home is government taxes, levies and charges; removing stamp duty would increase development of new homes and improve affordability. 60 per cent of people between the ages of 60-69 live in homes that have two or more spare bedrooms. Replacing stamp duty with land tax would remove a barrier for many Australians which prevents them from downsizing”
“However, the third quarter is traditionally a slow period for sales anyway and we always see similar results during this time every year. The winter months always herald a slower period with the higher valued properties waiting for the better weather to sell. I have enormous optimism that in the coming months, sales will pick up considerably. Many respected national analysts are predicting Adelaide to be a leader in price growth in 2018. While winter is always a slower period, the situation is still not helped by the lack of Government first home owner grants and the crippling property taxes that exist in South Australia.”
“It is certainly welcome news that the median house price was a respectable $450,000 – only slightly down from the previous quarter, which is expected each year in winter but still most significantly prices are up from the same quarter last year” Mr Ouwens said.
Suburbs which have seen the largest growth over a 12 month period were Toorak Gardens, Dernancourt and Moana. Other big movers included Port Noarlunga, North Haven and Parkside. Top selling suburbs in terms of recorded sales over the September quarter were the everlasting Number 1 Morphett Vale, Paralowie and Parafield Gardens. Other top performing suburbs included Hallett Cove, Aldinga Beach and Aberfoyle Park.
“I say this every quarter but it is always very interesting to see the top selling suburbs and the suburbs that showed the strongest growth in median house price. And it is always the same. The key is affordability – a situation once again not assisted by the State Government’s refusal to consider alternatives to property taxation. When affordability is right, the property market is buoyant. The other reasons these suburbs are doing so well is that they offer a huge potential for investment and have excellent infrastructure and development projects underway. These results should constantly be a reminder to Government that property taxation is also dependent upon the volume of sales and that both go hand in hand. We need to move to a fairer system that removes barriers for those who may be looking to upgrade to larger homes, downsize to smaller homes, or get into the market to begin with.” Mr Ouwens said.
More broadly, the September quarter statistics showed that South Australia recorded growth of 2.50% compared to the same quarter last year but a 1.80% drop from the previous quarter.
The unit and apartment market showed a fantastic 5.45% increase in the median price compared to the same quarter last year but a 3.37% drop from the previous quarter. Sales were down from the previous quarter both in metropolitan Adelaide and across the State but significantly up from the same period last year.
“The third quarter of every year is tricky and in no way should the results of this quarter be taken to suggest that the property market is not heading in the right direction. It is imperative that we look at the median house price still being at a fantastic $450,000 and the fact that there are still fabulous numbers of sales being recorded in the suburbs that are consistently at the top of the list every quarter. I am extremely optimistic that sales will bounce back next quarter and that South Australia will continue to be one of the best places in the world in which to live, work and invest” Mr Ouwens said.