On the Sales Front
As most South Australian investors would know, the Adelaide market hasn’t performed in any particularly impressive manner this year. We have gone up a little… and down a little… and in essence have remained ‘slow and steady’ - as summarised by several different market reports. All reports seem to suggest minor fluctuations in both rental and sales markets over the past couple of years and mostly predict a possible increase of somewhere around 2% over the coming year.
We sat graciously and watched the eastern states have their frenzied booms while everything in SA ticked along ‘status quo’. But we also sat by and witnessed some rather unnerving economical adjustments at the end of the extreme growth spurts in those areas. So while we were not lucky enough to be a part of the real estate excitement going on in some parts of Australia, we also didn’t have to face the unpredictable fall-out and see our rental rates and capital values drop below, in many cases, ‘banked-on’ prices. Sometimes ‘slow & steady’ might not win the race but it prevents us having to go through the highs and lows of the journey and puts us in a position to fairly confidently assess and predict our financials.
On the front line, solid prices are still being achieved with a greater strength in the housing sector, leaving units slightly harder to move. Numbers of homes on the market is still lagging compared to the traditional Adelaide Spring-Summer market and for the past few years this appears to be the new trend. Lots of Adelaide home owners are deciding to hold on & in some cases renovate, effecting the volume of homes moving through the system. Realestate.com.au have reported that due to the increase in “time-on-market” for the average property over the past couple of years, they have been forced to extend their Premium & Highlight packages for extra weeks before lapsing to a standard on-line listing. Up until about 3 months ago The Premium, Feature and Highlight packages offered 6 weeks in their prime locations with additional features, before reverting to a ‘Standard Listing’ (which defaults the ad to a lower ranking, further down the web pages). Now, instead, the prime positions and feature options are being honoured for 8 weeks to allow extra time to sell and meet the market demands with the average time-on-market stretching out to more than around 6 weeks.
On the Rental Front
At Mayo’s our current vacancy rate in the rental department is sitting at around 0.7% which is excellent for this time of year (less than 1%)! Historically December and January are filled with lease-breaks and relocations but for some reason our current tenants mostly seem settled and keen to stay-out the Christmas period. This is good news for our landlords and is not necessarily indicative of the market in general, as we have spoken to several other agents who are not reporting the same level of stability.
The REISA reported recently that the vacancy rate is somewhere between 3-3.5% as a general figure and ‘time-on-market’ is sitting at around 4-6 weeks. This is a fairly ‘normal’ and stable figure but shows our stats to be excellent for December 2019.