A lot of Adelaidians are using low interest rates as an opportunity to upgrade from their existing property into something more prestigious.
Confidence is certainly lifting among buyers in Adelaide’s eastern suburbs and city fringe. Six months ago, we didn’t have too many people missing out on homes and now they’re missing out on homes. It’s a combination of high demand and not enough properties on the market, and things are selling a little bit quicker. The average time on the market is four to six weeks.
In that price bracket, that $500,000 to $1 million range, there are a lot of buyers, and a lot of people upgrading, using the interest rate drop as an opportunity to upgrade from their existing property. People are capitalizing on what they’ve already bought. We’re finding that you’ve got a lot of people who are using the opportunity to upgrade, and we’re finding that people are time poor. They do look into extending their homes and doing renovations but if you’re a busy working couple, you may not have the time to go down that path.
The market that is $700,000 to $1.2 million is doing reasonable well because they’re the people who are upgrading. They are the ones who are professionals who haven’t got time to do renovations and they are prepared to pay more to move into something that’s already as they’d like it.
I’m selling a lot of properties at auction, using the auction process to be transparent among buyers, rather than selling them beforehand so they can see in an open arena what the market is telling us properties are worth. That also helps the vendors.
We are seeing more buyers from interstate. We are seeing quite a number of people coming over from Victoria and New South Wales. People are coming back to be with families here, and also opportunities to get into the real estate market ownership.
We’re not going to see the boom of Sydney and Melbourne because Sydney and Melbourne has the population that Adelaide doesn’t, but people in Adelaide have a few dollars tucked away and they’re not afraid to bring them out when it comes to property.
What we’re finding which is a little bit disappointing is that some young people, years ago they would start with a unit and work their way up but now they just want to go straight into a house, and the unit market is lagging behind with sales at the moment. Investors are seeing it as a good opportunity to come in and pick up a property. People are being more ambitious with their property purchases and they are prepared to take bigger mortgages, particularly young couples, rather than starting off with a unit.