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Two recent forecasts have given positive news for South Australian real estate in the short to medium term.
Leading business analyst and forecaster BIS Shrapnel predicted Adelaide is set to be part of a nationwide trend in increasing demand for residential land.
In its report “Outlook for Residential Land, 2013 to 2018”, BIS Shrapnel singled out Sydney and Perth as the fastest growing residential land markets in the country, but said Melbourne and Adelaide were likely to enjoy more modest rises, with land demand in the South Australian capital to remain “subdued, although growing”.
According to BIS Shrapnel, Adelaide and Melbourne enjoyed the strongest residential recovery following the Global Financial Crisis, but the boom in land production and the subsequent growth in land price has seen demand for new houses peter out in recent years.
BIS Shrapnel also pointed out that improved housing affordability, which was fuelled in part by historically low interest rates, will likely lead to a “moderate” increase in demand for new houses in Adelaide. Although it said this will ultimately depend on whether the excess of dwellings in the city’s property market remains.
Meanwhile, property statistics provider RP Data said numbers of property investors are growing around the country, although the level of first home buyers has dropped off.
“In May 2009, the total number of owner-occupier finance commitments from first home buyers made up 31.4% of the market, whereas that number fell to just 14.6% in May this year,” said RP Data’s Cameron Kusher.
Professionals CEO, Ted Piteo, said the RP Data news suggests properties that are not being snapped up by first home buyers are instead finding space in an investment portfolio.