Current Property Market Trends: What You Need to Know

Thinking or looking at buying a property? With that thought hovering in your mind, and the state of the real estate market currently, it is suggested you do your research to get a gauge on what is actually going on because not only will you be aware of the latest trends – but you could also be saving yourself some big dollars – and time for that matter.

With the pandemic still lingering in early 2022, house prices saw a significant rise in March with an increase of 28.1%. It is noted that along with the rest of the country, Adelaide recorded strong price growth. However, when comparing these results to the last quarterly period, data showed that 2022 performed four times slower in comparison. But there is relief on the horizon, with the rate of growth slowing significantly and along with it the urgency to buy.

Are buyers becoming stifled by affordability constraints?

A trend to keep a close eye on – with house prices growing three or four times faster over the last annual period, it has resulted in a price difference that is at an all-time high, with the value of houses in some cases doubling. It is predicted however that higher interest rates could bring increased stock to the market and reduce the number of competing buyers, but this is a double-edged sword as this also serves to limit borrowing capacity while pushing property prices lower.

House prices will continue to fall

Prices fell in Adelaide for the first time this year in August, down 0.12% which is the largest price fall since mid-2019. Adelaide is still considered to be a relatively affordable market, so we are expected to see smaller price falls than other capital cities, but they are predicted to continue none the less. So now the question is, do you play the waiting game hoping for increased affordability and more housing stock choices while also risking your borrowing capacity? Confidence is showing signs of rebounding as consumers shift to acceptance of the realities of the property market and begin to adjust.

Cost of living increasing

Along with the increase in house prices comes the second unfavourable market condition, a rise in the cost of living. External factors such as the Russian and Ukraine war has influenced the cost of food, oil and gas to significantly increase due to shortages. As well as this the pandemic restrictions have eased, with travel overseas and interstate being allowed and more accessible again. Therefore, individuals are having to fork out more money on more daily living costs and are unable to commit to long term purchases such as a first home. This is forcing some people to make difficult decisions or reevaluate their future.

The cost of living problem is forcing lenders to take a closer look at borrowers’ personal expenses when determining affordability, therefore there is little question that mortgages will grow more costly and difficult to get in the coming months. Many homeowners currently have fixed rates, so prospective purchasers will immediately see the consequences, as well as those reaching the end of their fixed periods.

Interstate Investors affecting supply?

Trends in residents from interstate such as Victoria and New South Wales purchasing properties in Adelaide has almost tripled this year which is a serious factor to consider for home buyers living in SA. Due to Adelaide’s cheaper and therefore relatively affordable price point, comparatively better returns, and robust rental market, there has been an increase in the number of out-of-state investors purchasing investment properties. Sales to interstate buyers are at historical high levels and this is likely to continue so long as South Australia continues to maintain good levels of safety and liveability.

2022 has seen a crazy first half of the year, and a lot has come unexpectedly, especially in terms of the property market. Other important trends to keep an eye on during your house hunting period includes;

• Availability of property types in your areas
• Economic instability
• High levels of vendor discounting
• Latest auction clearance rates
• Consumer sentiment

We hope the information above will be useful to you while you search for a home. As always, we want to emphasise that every market is unique, so it’s critical to focus on what’s occurring in your neighbourhood rather than just what’s going on nationally. Lofty Building Group understands the challenges of building the perfect home, which is why we developed a process to make things simple.

It all starts with a conversation. Get in touch with Lofty today and build your dream home.