Auctions strong in SA
Auction sales rates are improving, at least in South Australia, according to new data released by the Real Estate Institute of SA.
Real estate auctions results in South Australia were buoyant and institute president, Robin Turner, says the figures prove the market is strong.
This week, 75 per cent of all homes being presented to auction were sold. This number is up on the 70 per cent recorded last week.
The new figures will no doubt please the real estate industry which has been bracing for trouble during the global financial crisis but so far the market seems to have come through relatively unscathed.
Mr Turner commented that properties were receiving high numbers of visitors at open inspections and the properties were selling quickly, therefore this improvement in numbers comes comes as no surprise to the Real Estate Institute.
He is confident the strong trend would continue regardless of the increasing interest rates and reduction to the first home buyer grant.
"Prospective buyers would have factored in any further rate hikes in the short term and demand for homes will not suffer as a result of any increases," he said.
"Factors like the increasing population and popularity of bricks and mortar as an investment outweigh a negative like rate rises."
The first home owner grant is being scaled back to its original amounts, gradually. From December 31, it will revert to $7,000.
And, financial markets are still tipping a November rate rise, with the Reserve Bank of Australia giving strong indications that official rates will rise to around 5% by this time next year.
RBA governor Glenn Stevens has already made statements saying the current cash rate of 3.25% will not last, saying these historically low rates are 'emergency levels'.
AMP chief economist Shane Oliver is just one voice among many who strongly believe interest rates will keep rising, after the RBA raised rates by 25 basis points at their October policy meeting.
Home loan rates were quickly increased by the full 0.25% and variable mortgage rates now hover close to 6 per cent.
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