A cut in mortgage interest rates is critical if South Australian property prices are to rebound, the Real Estate Institute of SA (REISA) has said.
“In the later part of 2011, there was speculation of interest rate drops and the market eagerly awaited this. However, when they didn’t eventuate, a lot of buyers held off purchasing and are still waiting to see what the coming months hold,” REISA president, Greg Moulton, said.
“It’s really tough out there for vendors looking to sell as prices have eased over the last 12 months and the time taken to sell properties has also risen considerably.”
“There is no doubt that what is needed is some movement in interest rates and the property industry will keenly watch the Reserve Bank’s May decision.”
REISA’s property sales data for the March quarter revealed the metropolitan median price for the March quarter has moved to $380,500, which is 7.2 per cent below the median price in the corresponding quarter in 2011 and 2.44 per cent below the median price for the December quarter.
REISA said around 3,600 houses changed hands in the past three months, which was nearly identical to the December quarter of 2011 and also, the March quarter of 2011.
“Although the volumes are down on the higher years, the fact that this amount of houses are still selling each quarter completely dispels the myth that the market will crash,” Mr Moulton said.
“Of course the industry would like to bring more buyers and sellers together, but what the figures show is that there is still a solid volume of properties turning over which is important to know if you’re in the market at the moment.”
Commenting on suburbs which performed well in the March quarter, Goodwood (37 per cent), Northgate (22 per cent) and West Beach (21 per cent) topped the list. There was not any clear patterns of suburbs which performed more strongly than others.
“Examining patterns of the data shows that the outer areas are definitely feeling the pressure of tough economic times the hardest and a fall in interest rates will also be welcomed the most strongly from this group of homeowners and buyers,” Mr Moulton added.