Louis Christopher from SQM Research analyses the way house prices move using data from the Australian Bureau of Statistics.

He says there is a slowdown occuring across Australia and Adelaide is part of that slowdown.

He says over the 20 years it is likely prices will continue to grow but “It’s also very likely that we are going to see a correction of sorts and even now when we’re looking at the market there’s suddenly a slowdown happening in the Adelaide market,” he told Ian Henschke from 891 ABC Adelaide Mornings.

“For example we like to look at the total number of listings in the market because that’s a good measure of supply, obviously if there is more supply in the market that can actually put downward pressure on house prices and when we look at the supply we can see now that Adelaide is recording approximately 15 thousand listings in the market place wheras twelve months ago there was only eight to nine thousand listings,” he says.

Mr Christopher compares the current market with 2008 which was another period of downturn.

“In real estate it really can be all about price, that’s what it boils down to.

“If the price is too high people won’t buy it, I can tell you right now that in the middle of Adelaide there is a property … that’s been on the market since May 2009 and the owner there hasn’t changed her asking price and just sits there and the problem is and it’s quite clear that the owner is just asking too much for that property.

Mr Christopher says the market is flat with the outlook for this year for marginal falls.

As an example Mr Christopher talks about the postcode of 5000, “Right now there are 420 properties that have been on the market for two months or more in that marketplace and twelve months ago that was down to basically only about a hundred so there’s a lot more stock in the market for Adelaide and I would argue because of that it’s likely to put downward pressure on prices.”

He recommends sellers do their research to price their house properly, and get an independent valuation seperate from the recommended selling price from a real estate agent.

“It’s clearer a buyer’s market, pretty much nation-wide, some cities more so than others,” says Mr Christopher who says they are most concerned about South East Queensland and a huge increase in the number of houses on the market.

Mr Christopher says sellers have to be careful, if they don’t reduce their asking now to meet the market, they might have to drop prices further later on.

“That’s the problem that unfortunately many sellers sort of get caught in, they say I don’t want to take a loss, I don’t want to lose the money, I don’t want to drop my asking price, yet perhaps if they did it, they went to meet the market, they’d find yes okay a bit of pain now, it wasn’t a great experience but perhaps they might have saved themselves 20 or 30 or 40 thousand dollars twelve months from now if the market continues to fall,” he said.

The Real Estate Institute of South Australia is careful in choosing how to describe Adelaide’s property market but says prices are not going down.

“I think we are absolutely in the middle of a cycle … and we’re just in a real part of the market where we’ve come off a bit of a flurry with property prices have sort of gone through the roof over the past couple of years up until last year and I think that there’s some, not correction as far as prices are going, just some rationalisation in the marketplace,” says Greg Moulton, Institute Vice President.

Mr Christopher agrees with the Real Estate Institute that the median houseprice has not dropped, but says interest in buying houses has fallen and sellers are having to drop prices to meet the market.

Source: Brock Harcourts- March 2011