Wednesday, December 02, 2009

Dynamics changing, but Adelaide's market healthy and stable.

Dominating real estate news this week: the Reserve Bank’s controversial third consecutive interest rate rise, Westpac’s instant move to drive rates even higher & the release of CommSec’s report into the size of Australian homes.

Westpac are leading the “pack” with their 0.45% hike in rates. Certainly disappointing, but is this the trigger investors have been waiting for to re-enter the market? RP Data’s view is... “The twenty five basis point rise from the Reserve Bank is likely to take the average variable rate up to 6.55%... This is still well below average levels which tend to be above 7% & significantly lower than the recent peak when mortgage rates were 9.6% in July & August last year.”

As the First Home Owners Boost ends this month & with interest rates moving up, the dynamics are changing quickly. Investors have been waiting for these events & InsideStory has been predicting them. We have already seen a softening of the sub $500,000 market as buyers have gone from “anxious & enthusiastic” to “cautious & conservative”. Meanwhile the top end of the market has been fast & furious, making up for the record low volumes this bracket experienced last Spring.

Consistent prices plus last month’s volume of auction & pre-auction sales at all levels, (even in the $3-$4 million range), reflect a healthy stable market. Buyers, a reminder to register for VIP advice on “off market” listings at

Now some highlights from RP Data’s Riskmark Monthly report & CBA’s CommSec Research Report released this week.

RP Data
“Over the first ten months of 2009, Australian home values have risen by 10% following on from their 3.8% peak-to-trough falls in 2008. Over the year-to-date Melbourne has been Australia’s best performing capital city, delivering capital gains of +14.9%. Sydney is up by nearly 1% per month with cumulative growth of 9.9%... most of the other capital cities have performed strongly with Darwin (+12.7%) leading the way, followed by Canberra (+11%), Brisbane (+6.9%), Perth (+6.1%)
& Adelaide (+4.6%).”

“Australian homes are biggest in the world. Data commissioned by CommSec from the Australian Bureau of Statistics shows that the average floor area of new homes hit a record high of 214.6m² in the last financial year... the average size of new homes started in the US stood at 201.5m².

For the first time in at least a century, the number of persons per household rose during the 2007/08 year from 2.51 to 2.56 persons... If the size of the average household continues to rise, there will be reduced demand for new houses & apartments.”

The terrific news is that Adelaide’s market continues to be stable, consistent & reliable... you can’t ask for more than that! To read the full reports go to

Why not get even more involved in the world of real estate? We are “live & interactive” every Wednesday at 1pm on, answering your property questions live plus those sent in to This week’s show was compulsive property viewing including a sensational interview with RP Data’s David Williams & Toop&Toop’s own Peter Veitch. If you missed us live, this broadcast is now available to view or download as a podcast at

Anthony Toop, Managing Director.

© Toop Real Estate Group

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