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There’s been recent speculation in the media that Australia is again on the cusp of a property bubble, including a report on the 7.30 program on the ABC last night.
We’d like to reassure any South Australian property investors worried about the prospects of a housing bubble that the property price growth is by no means Australia-wide.
“Adelaide’s median house price according to RP Data figures for September, has our median at $375,000,” said Professionals CEO, Ted Piteo. “This is a 1.1% increase over the month, and just 0.3% over the quarter. We’re still one of the most affordable capital cities in terms of house prices.”
“Adelaide has never had the rollercoaster ups and downs that you can get in property markets such as Sydney, where the heat is now, and Melbourne. Here it’s so much more steady as she goes.”
Mr Piteo said the historic low interest rates was a reason driving housing market activity, in both construction of new homes, and purchase of established housing.
“As long as our banks continue to have strict criteria in terms of the money they lend, we should be okay. What we don’t want to see is people getting in over their heads, or borrowing more than they can afford.”
Mr Piteo said it was important purchasers set themselves a limit when considering buying a property at auction, and stick to it.
RP Data and Rismark International housing market results for September showed the combined capital cities index recorded a 1.6% rise over the month.
Since the beginning of June 2012, capital city dwelling values have increased by 8.7% through to the end of September 2013.
According to RP Data research director and analyst Tim Lawless, the September gains were primarily fuelled by Australia’s two largest housing markets, Sydney and Melbourne, where residential property values in each city were up by more than 2% over the month. “We haven’t seen market conditions this strong since April 2009 for Sydney and May 2010 for Melbourne,” Mr Lawless said.
However, most other capital cities are recording much more subdued housing market conditions. Dwelling values moved lower in Brisbane (-0.3%), Perth (-0.1%), Hobart (-2.0%), Darwin (-2.5%) and Canberra (-0.7%), whilst Adelaide values posted a 1.1% capital gain over the month.