Well the big question on everyone’s mind is has the South Australian property market began an upturn with latest statistics showing that home prices across the state increased by 1% over the last month.

This doesn’t come as a huge surprise as out in the market place without doubt we have seen larger numbers of people out looking for property and stock volumes seem to have stabilised. Australia’s largest mortgage broker AFG, reported a 40% increase in national mortgage sales, a very encouraging figure when compared with the previous year which really indicates a great start to the first quarter in 2012.

Nation wide prices
The strong February results, accented by capital gains in Melbourne and Sydney of 1.8% and 0.8% respectively, likely reflect the impact of the November and December Cuts. The Performance of the housing market over the 12 months to last month paints a very different picture. In the nations capital cities, house and unit prices fell a combined 4.4%.

Property prices outside the capital cities have fallen 2.3%.
The only capital city to record an improvement in home values was Canberra, where dwellings registered a 0.4% capital gain.

For last month Darwin recorded a 5% rise in values after many months of declines, and Adelaide’s housing market was showing improvement with values rising 1%.

Hobart prices rose 2.2%. Brisbane’s prices dropped 0.1%, taking losses for the past 12 months to 7.6%, while in Perth values dropped 1.8%

Million dollar suburbs on the decline ( Adelaide bucking the trend )

• Sydney went from 102 suburbs to 92
• Brisbane has 2 retained
• Perth has 14 retained
• Canberra dropped from 3 to 1
• Adelaide increased from 3 to 4
• Melbourne from 28 to 11
• Hobart still does not have a $1 million dollar price tag

The Australian Property investor recently released its list of the top 100 capital growth suburbs Australia wide for 2012 with South Australia having 5 suburbs making the list.
Coming in at #5 was Bowden # 4 Ceduna # 3 Gawler #2 Hackam #1 Magill

Hello and welcome to the March edition of Hear it From Harris. My name is Phil Harris, Managing Director of Harris Real Estate.

This month we are going to look at the topic of foreign investment in the Australian property market and I will fill you in on what is happening with the government’s first home owner’s grant. So as always let’s get on with the show!

Foreign Investment

As much as we criticize Australia’s relatively tight regulations on the housing sector it’s not as bad as you may think. Stamp duty, land tax and other complications with purchasing property is daily news but when compared to other parts of the world, Australia actually shapes up pretty well. This has been clearly demonstrated by the influx of foreign investment we have experienced by Chinese investors.

Australia’s housing market narrowly avoided the worst of the GFC whereas in many places including China, house prices fell by up to 50% and more….The Australian public recently got an insight into the extremely difficult Chinese housing sector when the Reserve Bank released a report on the situation.

In 2010 the Chinese Government introduced some very strict measures. An example was the banning of new mortgages for anyone that owned multiple properties… so unless a buyer was prepared to fork out 100% cash for the purchase they would have no chance to purchase new properties. The Chinese Government also implemented a ban on non-residents investing in many Chinese cities making the work of a property developer an absolute nightmare! I cannot imagine the backlash that would occur if measures similar to these were introduced into the Australian market.

So again, while we do have some tough regulations it is nothing compared to other countries around the world. This has also meant that Chinese investors are choosing our beautiful shores in which to invest and to be honest this investment is really propping up the Australian housing market. In many apartment developments around Australia up to 60% is made up of Chinese buyers. Local Asian buyers have also made a big impact on the first home buyers market with many Chinese families choosing to set up their children in new apartments around the country.

A local example of this investment is in the north eastern suburbs of Adelaide. Chinese homebuyers are flocking to the area and taking advantage of the beautiful 1960s conventional house styles and natural surroundings.

So in short maybe we need to stop focussing on the negative aspects of our market and stop taking for granted how good we actually have it!

First Homeowners

Time is officially running out for first home buyers wanting a new home….or at least to take advantage of the State Government grant that comes with it. These home grants will be phased out as soon as July this year.

The Federal Governments’ $7,000 first home buyers incentive will remain for the time being but the $8,000 offered by State Government for newly built homes will be halved from July 1 2012 and phased out completely by July 2013.

In my professional opinion this is a bad move, why would the local government pull such a crucial incentive when the market isn’t performing that well…It really defies logic that it will now be made even more difficult to get into the market.

On the upside there is still time to make the most of the grants but people need to move quickly. By taking advantage of the $7,000 first home owner grant you can make a real dent on the cost of stamp duty and then the $8,000 can be used to ease the burden of a hefty deposit. With the ever tightening lending requirements by the banks this cash injection becomes even more important to those attempting to enter the market.

There is plenty of stock currently on the market, interest rates are down and affordability has significantly increased if there was ever a time to buy it is now! I imagine we will see some really positive activity in the next year as people rush to capitalise on these grants before they are dissolved.

Historical Graph – house prices in last 30 years.

Finally I would like to show viewers what has happened with Australian house prices over the past 20 years.

Well that’s it for this edition of Hear it From Harris. Stay tuned next month for another insight into the South Australian property market!

This month the HOT topic is rental prices on the rise, as recent statistics show that South Australians would rather pay excessive rent in prestige suburbs rather than purchasing property, in many instances.

West Lakes is the most expensive place to rent in South Australia, which comes as no surprise as it offers some of the most luxurious homes in close proximity to the beach and great shopping and sports facilities. The median weekly rent price for a house in West Lakes in 2011 is $588 – reaching nearly $1000 a week in some properties. Next on the list is Stirling, which offers picturesque country living with a median weekly price of $550 in 2011.

The most expensive rental price for a unit is $475 a week in Rose Park, which isn’t a surprise as it attracts singles and couples wanting suburban living in close proximity to the city.

Suburbs that have shown the largest increase in weekly rent include Glenelg homes, which have doubled their median weekly price from $245 in 2010 to $490 at the end of 2011. West Beach has also seen an increase of just over 40%. Rural suburbs have also noticed a rise, as Whyalla is up 38% and Roxby Downs nearly 30%. The mining boom has attracted a lot of people to these areas which will only increase in the coming years.

On the other side of the spectrum the average weekly cost of renting has fallen in Aldgate, St. Georges and Newport Quays, with the cheapest housing accommodation found in Peterborough, at an average of just $145 a week.

Interestingly enough, landlords in Peterborough receive the highest gross rental yield of 7.7 per cent, whilst gross rental yields in West Lakes were only 4.3 per cent in 2010. For this reason, when purchasing for investment purposes, I suggest calculating gross yield before looking at an increase in rental income.

Now, everyone has heard the saying “It’s not what you know but whom you know..” and this is very true in many facets of life including real estate.
Real estate agents have historically been commissioned by the vendor, at Harris Real Estate we believe a strong relationship with an agent can also be beneficial for a buyer.

From being one of the first to hear about new release properties to having access to pre-release deals, established relationships with real estate agents is one of the best ways to ensure a buyer finds a perfect property relatively fast.

I see a strong trustworthy relationship as beneficial for both parties. The buyer has access to the finest properties before the general public and the vendor has the chance of selling the home before time and money is invested on open inspections and further advertising.
I value the relationships I have with my buyers in the highest regard – as I do my vendors. For this reason when it comes to the negotiation process both parties involved feel they received the best deal.

A great real estate agent is also a good source of industry specific information.

Agents are aware of local medium property prices, demographics and trends which is always helpful in making an informed decision.

Buyers should become familiar with agents by visiting numerous open inspections, introducing themselves and explaining the elements they are looking for in a home. An interested agent would begin communication with a follow-up call to measure your interest in their property and from there the relationship begins.

Well that’s it for another edition of Hear it from Harris. I hope you have been able to take some good advice from this edition. Remember February looks like the month that interest rates may be lowered which will help to even out the playing field between buyers and sellers.