Revival defies the odds

Property Guide 2010 - Dean and Stefanie Jones out the front of their new family home in Springfield. Picture: Marschall Michael. Source: AdelaideNow

Luxury property resurgence, keen investors and satisfied first homebuyers dominated the South Australian real estate market in the final months of 2009.

The finish contrasted with little real estate activity and fears for job security and financial stability at the start of the year.

First homebuyers dominated the middle-to-low end of the property market in 2009 and kept the industry afloat during the economic uncertainty.

At $4,123,550, the year's top sale - an Unley Park mansion - fetched a marginally lower price than the previous year's most expensive property ($4.275 million).

Real Estate Institute of SA president Michael Brock says many buyers and sellers adopted a cautious approach to real estate in 2009.

"They were not selling their homes or buying unless there was a necessity to do so because people were concerned about their jobs and what repercussions would come out of America," he says.

Despite that, the metropolitan market had a total value of more than $7.6 billion in sales - $574 million more than the 2008 figure.

This pushed the metropolitan median house price up to $365,000 from 2008's $356,250.

First homebuyer activity continued, stimulated by the extension of the Federal Government's First Home Owners Boost until the end of the year.

It was halved from October 1.

During the life of the boost, demand pushed properties under $450,000 in the first homebuyer-friendly market up, forcing investors to take a back seat.

Meanwhile, interest rates dropped then went up . . . and up . . . and up.

The official cash rate ended 2009 at 3.75 per cent, pushing variable mortgage rates to about 6 per cent or in some cases higher.

At the end of 2008 the Reserve Bank of Australia's cash rate had been 4.25 per cent - but it was then cut in the new year by 1 percentage point.

BankSA general manager Chris Ward says the RBA put rates on emergency settings to enable Australia to withstand the global economic meltdown.

This also enabled smart buyers to trade up to higher-priced properties, he says.

"Many borrowers also used these low interest rates to make substantial inroads into their home-loan balances by keeping repayments at the same levels," he says.

The most affluent areas were in the eastern suburbs of Springfield, Rose Park and Unley Park while those with the best housing growth in the past 12 months were in the Adelaide Hills towns of Oakbank and Echunga and eastern suburban Rosslyn Park.

Mawson Lakes had the most sales by volume with 631 sales in 2009 and turned over $191,093,414 - the highest value in the state, even above central Adelaide which made $145,184,132.

Among the more unusual sales in 2009 was the home where the first Coopers beer was brewed, known as Coopers House.

The Norwood water tower hit the market and a creative buyer purchased the old police station at Colonel Light Gardens.

Mr Brock says this year has begun "very, very optimistically".

Mr Ward says the upper end of the property market in metropolitan Adelaide should make solid gains because business owners and executives are more confident about the direction of the economy.