Some snippets courtesy of BankSA’s economists:
Economic Growth:
The South Australian economy faces challenges in the year ahead but should be aided by the low interest rate environment and by the weaker Australian dollar. In 2014-15, the South Australian economy grew by 1.6%. It is expected to have grown 1.5% in 2015-16. The outlook for 2016-17 is for continued modest growth of around 1.25%.
Housing:
House prices in Adelaide have grown only modestly through the year to October. House prices are up 2.7% for the year to October 2016, while unit prices slipped 0.2%. According to Corelogic, the median house price in Adelaide is $437,500, while the median price for a unit is $355,000. Dwelling prices in regional South Australia are reported to have slipped 0.2% in the year to September 2016. The easing in unit and regional house prices is not good news for home owners and their consumer spending. For potential first home buyers, however, the news is encouraging, with affordability less challenging than in some of the other States.
Demand for owner occupier loans continues to lift, although the pace of growth has moderated. The number of new home loans in South Australia rose 3.9% in the year to August, down from a recent peak of 15.9% growth in the year to May 2016. Demand remains solid, however, reflected in auction clearance rates. In October, the auction clearance rate in Adelaide averaged 71.2%, up from an average of 63.5% over the past three years.
