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Rate Rises & The Adelaide Property Market

Emily Kitto, Director - Adelaide

As I am sure you are aware, it is responsibility of the RBA to set the interest rates in this country. Historically, the RBA has used interest rate rises as a tool to control inflation.

As inflation has been significant over the past 24 month, it is understandable that the RBA has begun to ‘pull the lever’. The question is, have they got it right this time around? I would argue no, but again, it is just my opinion. Firstly the set of circumstances that lead to the inflation were very unique, most notably Covid, associated supply chain issues and then significant government intervention and stimulus. This was not a typical economic cycle and traditional interventions are therefore not necessarily the answer. They (the RBA) appear to have been ‘late to the party’ and are now being far too aggressive, not allowing enough passage of time for the lagging statistics to evidence the already felt implications of the previous rate hikes. In any case, the train has left the station, and there is not much we can do but enjoy the ride.

A recent ANZ forecast is predicting a decline of 17% in values across SA in 2023. I am more optimistic and suggest that a value decline in the order of 7.5% to 10% is more probable.

Mark Robins

So, what does it all mean for the Adelaide property market, which is historically less volatile than many other Australian capital cities? Whilst the latest statistics from RPdata paint a relatively good picture for South Australia, having only a nominal decline in median values of 2%, compared to interstate declines in the range of 5% and 20% over the same period, I would suggest a stronger market correction locally is now imminent.

Feedback from real estate agents over recent weeks has confirmed fewer purchasers at opens and less registered bidders at auctions. Furthermore, these purchasers have become more discerning and are generally making offers at or below asking prices. More generally properties that are overpriced or poorly presented are now requiring slightly longer selling periods. The price point is also relevant with the low end of the market (sub $500,000) holding strongest, largely due to affordability, with the middle and upper end markets less robust. More specifically, property priced between $1,000,000 and $1,500,000 appears to be struggling the most.

More generally, we note that a large number of low-rate fixed term home loans (established at around 2-2.5%) have started and will continue to mature over the next few months, and we assume that such a jump to a rate of now circa 6%, will result in mortgage stress. As more people choose to sell due to mortgage stress, this will in turn increase supply, and this coupled with a softened demand, will further soften values.

A recent ANZ forecast is predicting a decline of 17% in values across SA in 2023. I am more optimistic and suggest that a value decline in the order of 7.5% to 10% is more probable.

In any case, this will have a direct impact on your clients and may be reason to encourage a property settlement sooner rather than later.

Did you know?

Acumentis are one of the only valuation firms in Australia to require all staff undertaking valuations for expert witness purposes to undergo an internal certification process. Obviously, our valuers must be Associate Members of The Australian Property Institute, but we also require that they have at least 5 years of experience in the suburb of the subject property. Only after they complete the Acumentis Family Law accreditation training & be assigned & approved by their managers, can our valuers undertake Family Law valuations.

Mark Robins
State Director SA
— Adelaide Property Valuers
CPV
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Acumentis National Family Law Team

STATE
Renee Pollak
Director
Canberra
Matthew Shadbolt
Valuer
Canberra
Zoran Jovanovic
Senior Valuer
Sydney
Tony Lenord
State Director Commercial - Sydney
Sydney
Natasha Khoudair
Valuer
Sydney
Robert Jupp
Valuer
Coffs Harbour
Daniel Carr
Valuer
Newcastle
Nathan Jones
Valuer
Norther Rivers (Lismore, Ballina, Byron Bay)
James Morrell
Associate Director
Norther Rivers (Lismore, Ballina, Byron Bay)
Angus Cooke
Valuer
Inverell
Tom McDouall
Director - Regional Residential Operations NSW
Newcastle
Terry Glitsos
Director NSW Government Statutory Assets & Legal
Sydney
Heath Craft
Valuer
Albury
Maria Ergos
Client Services Team Leader
Sydney Residential
Gregory Jordan
Valuer
Port Macquarie
Andrew McDonnell
Associate Director
Sydney
Tasso Balomenos
Senior Valuer
Sydney
Simon Mandile
Senior Valuer
Sydney
Philip Albert
Associate Director
Sydney
Peter Raptis
Director - Prestige Valuations
Sydney
Matthew Iglinski
Associate Director
Sydney
Tony Chahine
Associate Director
Sydney
Kevin Sze Tho
Valuer
Sydney
Emmanuel Ergos
Senior Valuer
Sydney
Justine Franklin
Valuer
Albury - Wodonga
Nick Power
Senior Valuer
Norther Rivers (Lismore, Ballina, Byron Bay)
James Simpson
Regional Director
Orange
Andrew Kemp
Director Valuations
Albury
Damian Daczko
Regional Director
Taree
Jonathan Lea
Regional Director
Inverell
Bryan Guest
Senior Director Advisory
Coffs Harbour
Amy Frankel
Regional Director
Port Macquarie
Tony Gorman
Director Valuations
Darwin / Perth
Amber Broughton
Valuer
Gold Coast
June Button
Valuer
Gladstone
June Button
Valuer
Gladstone
Rachel Schloman
Valuer
Brisbane
Lara Watts
Valuer
Bundaberg
Adrian Marks
Valuer
Brisbane
Scott Blanchard
Senior Valuer
Cairns
Dale Rohde
Senior Valuer
Cairns
Sarah Banner
State Director - Residential Operations, QLD
Brisbane
Clancy Miller
Valuer
Townsville
Paul Krause
Senior Valuer
Mackay
Matthew Galvin
Senior Valuer
Toowoomba
Lochlan Jones
Valuer
Noosa
Jack Macdonald
Associate Director
Roma
Cameron Norris
Valuer
Emerald
Jack Prosser
Senior Valuer
Toowoomba
Joshua Franklin
Senior Valuer
Brisbane
Ayla McIntyre
Senior Valuer
Roma
David Hosking
Regional Director
Cairns
Shane Poole
Senior Valuer
Bundaberg
Jared Teitzel
Senior Valuer
Brisbane
Sarah Godfrey
Senior Valuer
Brisbane
Henry Brown
Director
Brisbane
Rebecca Stephens
Senior Valuer
Sunshine Coast
Wayne Airey
Associate Director
Sunshine Coast
Alexandra Doneley
Senior Valuer
Emerald
John Burke
Director
Gold Coast
Geoff Duffield
Director – Family Law & Advisory
Brisbane
Hugh Innes
Senior Valuer
Brisbane
Jany Pezard
Director - Valuations
Sunshine Coast
Gareth Turner
Director
Brisbane
Andrew Mullins
Associate Director
Brisbane
Michael Everingham
Valuer
Gold Coast
Melissa Eilers
Regional Director
Hervey Bay
Chris Anderson
Regional Director
Sunshine Coast
Annette Smith
State Director Regional Operations (North)
Emerald
Lachlan Dunsdon
National Director Rural & Agribusiness
Brisbane
Paul Robbins
State Director Commercial QLD
Brisbane
Mike Henderson
Group Executive Director – Residential Operations
Brisbane
Mike Henderson
Group Executive Director – Residential Operations
Brisbane
Timothy Rabbitt
Managing Director & Chief Executive Officer
Brisbane
Joe Porter
Senior Valuer
Adelaide
Craig Farley
Valuer
Adelaide
Emily Kitto
Director
Adelaide
Mark Robins
State Director SA
Adelaide
William Simmonds
Valuer
Hobart
Peter Walker
Valuer
Launceston
Russell Cripps
Director Valuations
Hobart
Joe Stansfield
Regional Director - Tasmania (North)
Launceston
David Duffield
Regional Director - Tasmania (South)
Hobart
Alexandra Churches
Regional Director - Victoria
Bendigo
Quentin Churches
Associate Director
Bendigo
Patrick Monaghan
State Director - Regional Operations Victoria
Gippsland
Georgina Besliev
Valuer
Melbourne
Nathan Camac
Associate Director
Melbourne
Damien Stone
State Director Residential - Victoria
Melbourne
David Triaca
Senior Valuer
Melbourne
Paul Belcher
Associate Director
Gippsland
Phillip Bainbridge
Director Valuations
Melbourne
Brenton Jones
Associate Director
Gippsland
Will Phillips
Director - Rural & Agribusiness
Western Australia
Mitchell Fraser
Senior Valuer
Busselton
Felicity Graham
Senior Valuer
Bunbury
Rachel Kendall
Valuer
Mandurah
Jessica Ayerst
Associate Director
Perth
Tiffany Crago
Senior Valuer
Perth
James Sholdas
Associate Director Valuations
Perth
Tom O’Sullivan
Associate Director Valuations
Perth
Kate Bingham
Associate Director
Perth
Aaron Hughes
Regional Director
South West WA
Matthew Crofts
State Director
Perth
Rod Davidson
Director Valuations
Perth
Scott Robinson
Regional Director
Mandurah
Ross Sharp
State Director – WA – Rural & Agribusiness
Perth
Richard Graham
Regional Director - South West
Bunbury
Mark Eaton
Regional Director
Albany
Damien Schifferli
Regional Director - South West WA
Busselton
Brad Mazza
State Director - Residential WA
Perth
Renee Pollak
Director
Canberra
Matthew Shadbolt
Valuer
Canberra
Zoran Jovanovic
Senior Valuer
Sydney
Tony Lenord
State Director Commercial - Sydney
Sydney
Natasha Khoudair
Valuer
Sydney
Robert Jupp
Valuer
Coffs Harbour
Daniel Carr
Valuer
Newcastle
Nathan Jones
Valuer
Norther Rivers (Lismore, Ballina, Byron Bay)
James Morrell
Associate Director
Norther Rivers (Lismore, Ballina, Byron Bay)
Angus Cooke
Valuer
Inverell
Tom McDouall
Director - Regional Residential Operations NSW
Newcastle
Terry Glitsos
Director NSW Government Statutory Assets & Legal
Sydney
Heath Craft
Valuer
Albury
Maria Ergos
Client Services Team Leader
Sydney Residential
Gregory Jordan
Valuer
Port Macquarie
Andrew McDonnell
Associate Director
Sydney
Tasso Balomenos
Senior Valuer
Sydney
Simon Mandile
Senior Valuer
Sydney
Philip Albert
Associate Director
Sydney
Peter Raptis
Director - Prestige Valuations
Sydney
Matthew Iglinski
Associate Director
Sydney
Tony Chahine
Associate Director
Sydney
Kevin Sze Tho
Valuer
Sydney
Emmanuel Ergos
Senior Valuer
Sydney
Justine Franklin
Valuer
Albury - Wodonga
Nick Power
Senior Valuer
Norther Rivers (Lismore, Ballina, Byron Bay)
James Simpson
Regional Director
Orange
Andrew Kemp
Director Valuations
Albury
Damian Daczko
Regional Director
Taree
Jonathan Lea
Regional Director
Inverell
Bryan Guest
Senior Director Advisory
Coffs Harbour
Amy Frankel
Regional Director
Port Macquarie
Tony Gorman
Director Valuations
Darwin / Perth
Amber Broughton
Valuer
Gold Coast
June Button
Valuer
Gladstone
June Button
Valuer
Gladstone
Rachel Schloman
Valuer
Brisbane
Lara Watts
Valuer
Bundaberg
Adrian Marks
Valuer
Brisbane
Scott Blanchard
Senior Valuer
Cairns
Dale Rohde
Senior Valuer
Cairns
Sarah Banner
State Director - Residential Operations, QLD
Brisbane
Clancy Miller
Valuer
Townsville
Paul Krause
Senior Valuer
Mackay
Matthew Galvin
Senior Valuer
Toowoomba
Lochlan Jones
Valuer
Noosa
Jack Macdonald
Associate Director
Roma
Cameron Norris
Valuer
Emerald
Jack Prosser
Senior Valuer
Toowoomba
Joshua Franklin
Senior Valuer
Brisbane
Ayla McIntyre
Senior Valuer
Roma
David Hosking
Regional Director
Cairns
Shane Poole
Senior Valuer
Bundaberg
Jared Teitzel
Senior Valuer
Brisbane
Sarah Godfrey
Senior Valuer
Brisbane
Henry Brown
Director
Brisbane
Rebecca Stephens
Senior Valuer
Sunshine Coast
Wayne Airey
Associate Director
Sunshine Coast
Alexandra Doneley
Senior Valuer
Emerald
John Burke
Director
Gold Coast
Geoff Duffield
Director – Family Law & Advisory
Brisbane
Hugh Innes
Senior Valuer
Brisbane
Jany Pezard
Director - Valuations
Sunshine Coast
Gareth Turner
Director
Brisbane
Andrew Mullins
Associate Director
Brisbane
Michael Everingham
Valuer
Gold Coast
Melissa Eilers
Regional Director
Hervey Bay
Chris Anderson
Regional Director
Sunshine Coast
Annette Smith
State Director Regional Operations (North)
Emerald
Lachlan Dunsdon
National Director Rural & Agribusiness
Brisbane
Paul Robbins
State Director Commercial QLD
Brisbane
Mike Henderson
Group Executive Director – Residential Operations
Brisbane
Mike Henderson
Group Executive Director – Residential Operations
Brisbane
Timothy Rabbitt
Managing Director & Chief Executive Officer
Brisbane
Joe Porter
Senior Valuer
Adelaide
Craig Farley
Valuer
Adelaide
Emily Kitto
Director
Adelaide
Mark Robins
State Director SA
Adelaide
William Simmonds
Valuer
Hobart
Peter Walker
Valuer
Launceston
Russell Cripps
Director Valuations
Hobart
Joe Stansfield
Regional Director - Tasmania (North)
Launceston
David Duffield
Regional Director - Tasmania (South)
Hobart
Alexandra Churches
Regional Director - Victoria
Bendigo
Quentin Churches
Associate Director
Bendigo
Patrick Monaghan
State Director - Regional Operations Victoria
Gippsland
Georgina Besliev
Valuer
Melbourne
Nathan Camac
Associate Director
Melbourne
Damien Stone
State Director Residential - Victoria
Melbourne
David Triaca
Senior Valuer
Melbourne
Paul Belcher
Associate Director
Gippsland
Phillip Bainbridge
Director Valuations
Melbourne
Brenton Jones
Associate Director
Gippsland
Will Phillips
Director - Rural & Agribusiness
Western Australia
Mitchell Fraser
Senior Valuer
Busselton
Felicity Graham
Senior Valuer
Bunbury
Rachel Kendall
Valuer
Mandurah
Jessica Ayerst
Associate Director
Perth
Tiffany Crago
Senior Valuer
Perth
James Sholdas
Associate Director Valuations
Perth
Tom O’Sullivan
Associate Director Valuations
Perth
Kate Bingham
Associate Director
Perth
Aaron Hughes
Regional Director
South West WA
Matthew Crofts
State Director
Perth
Rod Davidson
Director Valuations
Perth
Scott Robinson
Regional Director
Mandurah
Ross Sharp
State Director – WA – Rural & Agribusiness
Perth
Richard Graham
Regional Director - South West
Bunbury
Mark Eaton
Regional Director
Albany
Damien Schifferli
Regional Director - South West WA
Busselton
Brad Mazza
State Director - Residential WA
Perth
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