The announcement of a Federal Election will have a relatively minor impact on real estate activity in South Australia as buyers continue to lead the charge for quality, well-located property. 

 Mr James Trimble, General Manager, Raine & Horne, “The only nod to the political and regulatory environment is that some first-time buyers are looking to lock in their first mortgages to beat the highly anticipated interest rate rises.

 “Moreover, the prevailing strong buyer confidence will continue to drive real estate values and activity in South Australia beyond the election and into the winter months,” Mr Trimble said.

 The Adelaide market is growing by 26.3% annually, while regional South Australian markets are up 18.7% over the same period[i].

 “In the late autumn and winter months, property markets generally slow. However, after solid summer and spring markets, plenty of buyers are still looking to secure a dream property in South Australia, which will drive market activity beyond the election and into the winter months,” Mr Trimble said. 

 According to Mr Trimble, the changing face of business in South Australia is central to the demand for real estate. Major blue-chip companies such as Pricewaterhouse Coopers and Commonwealth Bank have joined other global brands such as Google Cloud, Amazon Web Services, Accenture, Cognizant, Microsoft Azure, and Nokia 5G in establishing corporate offices in Adelaide.

 “These announcements have helped grow the appeal of working and living in South Australia and created more interstate demand for real estate,” he said. 

 Is now the time to lock into a fixed rate

 Adelaide-based Ms Sharon Burton, a finance specialist with OurBroker, agrees with Mr Trimble that some first-time buyers are seeking to lock into a fixed-rate loan before the Reserve Bank starts to increase the cash rate, currently sitting at 0.5%. 

 “Despite the gap between fixed rates and variable rates, locking in will make sense for some first-timers looking for some repayment certainty or other buyers concerned about the impact of rate hikes on their family budgets,” said Ms Burton.

 Ms Burton said the bigger issue for borrowers was the chasm between the Big Four banks and the smaller lenders.

 Working with their broker, Ms Burton states that, clients can often find the smaller banks offer much better terms, rates and service than the Big 4 and increasingly, customers are dumping the bigger banks to move to the smaller and more competitive lenders.

 To illustrate, the two-year fixed rate at Commonwealth Bank for an owner-occupier loan is 3.29% compared to Beyond Bank at 2.99%, according to data from OurBroker. These rates are based on a Loan to Valuation Ratio (LVR) of 90%.

 Ms Burton continued, “The Big Four have driven a larger gap on the fixed rates recently and with their service being at an all-time low, I’d recommend giving serious consideration to the smaller lenders who are coming up the ranks.”

“The smaller lenders have great lending teams in place and are embracing the latest in technology to get the loan deals done.”

[i] https://www.corelogic.com.au/news-research/news/2022/Australias-smallest-cities-drive-growth-in-national-housing-values-as-Sydney-and-Melbourne-decline