In the blink of an eye we’re already well into 2012. Early signs indicate a slow but steady recovery for the year ahead in the South Australian property market. This week we interviewed 3 key industry experts – Greg Moulton CEO of Brock Harcourts SA, Rodney Adcock Regional Manager SA/NT South of LJ Hooker and Ted Piteo CEO of SA Professionals to get their views on what lies ahead.
Broadly speaking, what are your expectations for Real Estate in 2012?
Greg Moulton (Brock Harcourts): South Australia will pick up the small loses of 2011 as far as capital growth across the state goes, led largely by the spurt of mining activity which has recently come to fruition. On the back of the mining boom there’ll be more people moving into the state so that will put pressure on areas like Roxby Downs and even those on the Copper Coast. We are certainly expecting that the small drop (5-6%) in medians which occurred last year will be reversed.
Rodney Adcock (LJ Hooker): I believe the market is poised to move in 2012. It’s all about interest rates. Another rate drop should see confidence return to buyers and demand should pick up. 2012 should be a year of renewed activity as the market gets back to ‘normal.’
Ted Piteo (SA Professionals): No doubt there will be more sales than 2011 as there has been some confidence return to consumers. I believe the first home buyer/investor market will recover as this market seems to be a confidence/opportunist market and there will be great opportunities, in contrast to the volatility of our share markets.
What trends do you predict will come forth or continue in 2012
Greg Moulton: Investors are certainly back in the market on the back of rental vacancy rates being quite low. Yields have also increased nicely due to high demand for rentals which has been welcome news for investors.
Rodney Adcock: As buyers are still very price sensitive, vendor expectations need to be adjusted to achieve a sale in a reasonable time frame. Investors will no doubt take advantage of the lower prices. I see a trend towards Auction as the preferred method of sale as it still proves to be the most efficient method, with days on market for an auction listing less than half that of private treaty properties.
What are the opportunities for buyers to keep an eye out for in 2012?
Greg Moulton: There are certainly going to be some good opportunities to buy in 2012, particularly in the upper end of the market at the $1-2m mark. Anything over $2m seems to be selling really well.
Rodney Adcock: Prices are the most affordable they have been for years. If interest rates continue to come back a peg or two this will stimulate activity so buyers have the opportunity to get a great property at an affordable price. My advice to first homebuyers is… Don’t procrastinate – do your research and buy now before prices start to rise.
Ted Piteo: Buyers should feel confident in buying in old established suburbs nearest to CBD but yet to be redeveloped. If affordability is an issue then something further out with good infrastructure should be considered. As always doing your homework as a buyer is key, but make sure you then commit to buy. Regional towns, especially those with mining projects seem to be performing but may not be right for everyone.
More specifically, what are the key suburbs that you predict growth for in 2012?
Greg Moulton: Keep an eye out for areas near the new Northern Expressway, such as Gawler, which are reaping the benefits of the new infrastructure development. The Barossa valley is also really gaining momentum with investment subdivisions coming onto the market. Areas close to the city and within the actual CBD itself that are showing promise include the precinct around the Adelaide oval, Royal Adelaide Hospital and River Torrens. Aldinga beach, south of Adelaide is one of the cheaper socio-economic areas and with infrastructure investment (shopping centres, schools, etc) the areas is set to prosper.
Rodney Adcock: In South Australia I see the key growth suburbs for 2012 being established suburbs close to the CBD like Prospect, Mile End, Hilton and Norwood as well as beachside suburbs with good links to the city like Christies Beach, Marino and Seaford. The key to growth is areas of good infrastructure, schooling and shopping facilities.
Ted Piteo: Key suburbs in SA set to experience growth are Christies Beach, Ingle Farm, Woodville and Magill. My picks for growth in regional areas are Roxby Downs and Port Lincoln.