January Market Update

Happy New Year from the team here at Turner Real Estate!

With 4,000 properties under management and 400 sales a year, we feel it is useful to share what we are seeing on the front line before any official data is released 30 days later.

Listing volumes, or sellers deciding to sell, are following a similar pattern to last year, with a steady number of new releases so far.

Buyers are adopting more of a wait and see attitude in their approach to what they offer but are still acting decisively when they see a well valued property and genuine buyer numbers at opens are strong but down a little from levels from early last year.

Units are enjoying their time in the sun as buyers are having to reconsider their borrowing power

The high-end market, which are properties with a value from 2.5 to $3 million is still strong for sellers and the rental market is still very tight for renters

 

Sales market

In recent mainstream media reports, we have seen a narrative of a doomed property market, with headlines such as ‘Plunging house values break 40-year record’, but this ‘data’ needs to be considered in context. This plunge was for a 10-week period and only related to three Australian cities – Sydney, Melbourne, and Brisbane. Also, we did see a national decline in annual dwelling values of 5.3% over 2022 but Adelaide had vastly different results, seeing 10.1% increase! This is outstanding and demonstrates just how resilient the Adelaide market is.

The growth we have seen in Adelaide’s property market is due to a few key factors including our property being more affordable than other states, high rental yields, low stock levels, and a net migration increase.

The RBA does not meet during January; however, it is likely that we will see further rises to the cash rate in February when they meet again. Once the RBA cease to increase the cash rate, we can expect to see housing values stabilise and even great numbers of buyers coming out in force, due to greater confidence in the market and their borrowing power.

Rent market

The vacancy rate has hovered around 0.5% and demand is still high for affordable 3–4-bedroom family homes within the price bracket of $400-$500pw.  Rental prices are still showing consistent growth with the average rent for houses rising to $556 per week and units to $402 per week.  As of December 2022, rental yields for 3-bedroom houses stand at 4.1% and units at 5.8%, which is very strong.  These trends appear to be continuing into the early part of this year.

Outlook

We anticipate Adelaide house values to remain strong but nationally it is anticipated there will be further falls in home values through the early months, followed by a stabilisation in housing prices after interest rates find a peak.

• Interest rates will be a major factor. The timing and peak in the cash rate remain highly uncertain but at least one more 25 basis point lift seems all but certain. The more interest rates rise, the greater the downside risk posed by higher levels of mortgage stress and life in distressed sales
• As interest rates peak and inflation eases, housing values are likely to stabilise. A broad-based RISE in values would be dependent on interest rates coming down, or on other forms of stimulus
• We expect a rise in the number of newly listed properties, as pent-up supply flows into the market
• Rental markets are set to remain tight in 2023
• Resilient labour market conditions are expected to underpin borrowing Labour market outcomes will be a critical factor in containing mortgage stress and empowering households to keep up with rising interest and rent costs through 2023

 

Help

Turner Real Estate can help in so many ways and the best action is to go to our website.

If you are a homeowner looking to sell, you can receive an Instant Property Estimate as a first step, to ensure you are staying up to date with values.

If you are seeking property management services, you can see how many tenants match your property

If you are a renter, be sure to register on our website, as many of our listings can only be found on turnerrealestate.com.au.

Buyers can register online as well.

 

That’s it from us and we look forward to helping you soon.