The median house price in Adelaide fell by 0.5 per cent to $491,422 in the March quarter, bringing an end to consistent years of growth. According to the latest Domain Group House Price Report, this decrease represents the sharpest quarterly decline in Adelaide house prices since September 2012.
However, Adelaide is not the only capital that experienced a dip in house prices. They also fell on most capitals in the March quarter, with the exception of Melbourne and Hobart.
Domain Group chief economist Andrew Wilson attributed this to weakening economic activity, which in turn affected a fragile consumer and investment sentiment.
"Similar to other capitals, Adelaide has experienced a flattening of price growth, with future growth likely at a slower rate than recent years," he said. He also noted that tighter banking regulations had taken "a bit of froth out of the Adelaide housing market."
Still, there is a bit of silver lining to the house price dip. "The prospect of weaker house price growth, however, will be welcomed by prospective first home buyers still struggling to get into the market," Wilson said.
Meanwhile, Stephen Ring from Ring Partners shrugged off talks of a softening market, saying that Adelaide is not as volatile as Melbourne, Sydney, and Brisbane.
"Adelaide has always moved to a different beat," he said. "It rises and levels and rises and levels. In my opinion, there's a shortage of stock out there right now and there's a shortage of buyers as well." He expects incremental growth in the market over the rest of 2016.
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