adelaide house prices dive

http://www.news.com.au/adelaidenow/story/0,22606,24082209-5012798,00.html

DAVID NANKERVIS

July 27, 2008 12:15am

HOUSE prices fell in more than 60 Adelaide suburbs in the first six months of the year, new figures from the Valuer-General show.

Almost half of the 20 biggest falls were in the southern suburbs and real estate experts warn further drops are likely in some areas.

Auction sales also plummeted, with just 28 per cent of homes selling under the hammer last weekend compared with 83 per cent at the same time last year, Australian Property Monitors says.

Soaring living costs driven by high petrol prices, growing household bills and interest rate rises this year have been blamed for cutting real estate demand and bringing Adelaide's average house price growth to a standstill.

Worst affected was Christies Beach, where home values dropped 19 per cent.

Average prices there fell a massive $71,500 - from $374,000 to $302,500 - between the first and second quarters of 2008.

Brock Harcourts executive director Greg Moulton said fears interest rates might increase again this year meant people were "tightening their belts".

"Petrol price rises and interest rate increases have added around $80 to $100 a week to household budgets and this does have an effect on the market," he said.

"Some suburbs could see further price falls in the next financial quarter." Mr Moulton said some Brock Harcourt offices in the southern and northern suburbs had reported a slowdown in sales.

"We are talking here about very traditional, average income-earning residential suburbs where the tightening of family budgets has the greatest impact," he said.

While the average Adelaide house price - $365,500 - remained stagnant between the first and second financial quarters of 2008, Valuer-General figures this month showed 28 suburbs had price falls of more than 5 per cent.

Other southern suburbs - with 10 or more sales each quarter - to move backwards included Seacombe Gardens, McLaren Vale, Ascot Park, Aberfoyle Park, Marino and Hackham West.

Falls also were reported in Mt Gambier, Port Lincoln and Renmark.

Underlining the slowdown was a 23.5 per cent fall in the number of homes on the market in the first three months of the year compared with the same time last year, according to real estate analyst RP Data.

"Clearly the growth rate has fallen back significantly compared to last year," research director Tim Lawless said.

"And suburbs with the lowest level of demand are those in the outer regions, which lack infrastructure like shopping centres and public transport."

The Real Estate Institute of SA said the end of the real estate boom - which saw average Adelaide house prices jump 18 per cent - was part of the normal price cycle.

"You can't have a situation where house prices rise relentlessly," REISA president Robin Turner said.

"And I don't believe house prices can stay down."