March Market Update

Hello and welcome to our March market update.
To start, we must address the key headline. On the 7th of March, the RBA raised the cash rate for the 10th consecutive time to 3.6 %. While inflation was slightly lower at 7.4%, there were stronger-than-expected January retail sales. Another rate rise is almost certain for April BUT it is forecast that a rise in May is no certainty, indicating good news that we are edging closer to when rate rises will stop.

 

Coalface

At the coalface of selling and renting property, the story is still a bit different from the media headlines. Post covid, property values have been maintained in Adelaide and there is still a gross undersupply of houses to buy and rent. This is keeping competition healthy and the time on market short.
In saying this, we do note that some buyers are acting more indecisively and seeking greater justification before offers are being made or when bidding at auction due to the uncertainty of exactly when the rate rises will end. We believe this behaviour will be short-term and in step with more interest rate certainty.
Our other observations include an increase in price sensitivity in the market due the capacity of what buyers can offer, increased discussions around mortgage stress and properties with values under $500,000 performing strongly with many selling in 1 week.

Sales Data

In the sales sector, Adelaide housing prices have remained even for the month of February, in the face of a 0.1% fall in national housing prices. Although national prices have continued to fall, the rate of falls has slowed, suggesting that prices may be stabilising. Even with rate rises, and falling housing prices across the nation, median days on market in Adelaide have remained at 31 days – the same as this time last year.
We have been thrilled to see that auction rates in Adelaide have remained some of the highest in the country, with a clearance rate of 80.8% last weekend. These positive results are being echoed across the nation, with national clearance rates not quite as high but hovering around 70%
Across the nation there has been a continued lack of new listings in comparison to previous years, meaning there is still a lot of competition for buyers, competing over few properties.

Rent Data

Rental prices are appearing to stabilise around the $550-560 per week mark and vacancy rates are still very low at 0.5%.
Last month, the South Australian government introduced new laws surrounding rental properties. These new laws aim to stamp out rent bidding. Although rent bidding is uncommon in the South Australian rental space, these new pieces of legislation will create a fairer playing field for all applicants.

Outlook

Our outlook is that property values will remain even or very slightly declined over the next few months. That buyer uncertainty will be slightly heightened until we know when interest rates will peak and that the demand for rental properties will remain strong and rent yields will continue to be attractive for landlords.

How TRE Can Help

If you are selling, we can help you overcome many of the obstacles involved.
Any appraisal we provide always starts with a chat about what outcome you desire and then most commonly we delve into presentation advice. We have trades to help you with work to be done, we can put you in touch with a loan broker if you need help with bridging finance, we can help you find a rental property and assist with the buying process, and lastly, we can help guide you with funding for marketing, stylists and paying trades to name a few.