REA | South Australia Property Market: Rate Fears Stall Buyers

Interest Rate Uncertainty Holds Back the South Australia Property Market

In The Advertiser, journalist Jessica Brown reports on new Westpac research showing South Australians are more likely than people in any other state to delay property decisions because of interest rate concerns. The article also features Oliver Hume research and commentary from Oliver Hume Chief Economist Matt Bell on how first home buyers are responding to current conditions in the South Australia property market.

Interest Rates and Housing Affordability Weigh on SA Buyers

According to the latest Westpac Home Ownership Report, 38 per cent of South Australians are delaying plans to buy or sell because of interest rate concerns, a factor playing a greater role in SA than anywhere else in the country. Housing affordability was the biggest factor affecting plans to buy or sell, cited by 44 per cent. A further 40 per cent said it was a bad time to purchase a first home, and 17 per cent planned to buy within the next year. Buyers are also adapting, with 24 per cent adjusting their deposit target and 21 per cent considering a different property type.

Westpac consumer chief executive Carolyn McCann described a mood of concern rather than crisis, saying the market had paused as people weighed conflicting signals on interest rates, house prices, cost-of-living pressures and the broader economy. She said mortgage applications had fallen around five per cent since May, but activity was beginning to recover, with applications up 15 per cent from the July low.

First Home Buyers Lead SA Activity, Says Oliver Hume

Oliver Hume research cited in the article shows 89.5 per cent of buyers in SA during September were purchasing their first home, the highest share over the past year. Oliver Hume Chief Economist Matt Bell said that while many people were apprehensive about the market, many first home buyers were making the most of the opportunity after years of struggle.

“First-home buyers are still going to transact whereas second-home buyers, there’s no reason to sell in a falling market,” Mr Bell said, adding that the pain is bigger at the top of the market. He noted that while easing prices were helpful, rising interest rates were reducing first home buyers’ borrowing capacity. “It will be tough until rates stop rising,” he said, while also saying it was probably as good an opportunity as any to buy now and over the next six months.

Read the full article:The Advertiser