South Australian house prices have defied the global property plunge by recording 4 per cent growth in the past year.
Valuer-General figures show median house prices across the state increased to $332,800 in the December quarter from $320,000 a year earlier.
Adelaide metropolitan prices grew 1.4 per cent for the year to $360,000 while rural prices rose 2 per cent to $245,000.
But a slowing property market was reflected in a 0.7 per cent fall in metropolitan prices between the September and December quarters, and a 0.8 per cent fall in rural prices.
This was still much less than the 6 per cent fall experienced by Perth homeowners in the September quarter – the worst capital city result recently recorded.
Falls of up to 50 per cent in the U.S. housing market triggered a global financial crisis when borrowers defaulted on their loans.
Similar plunges have been experienced in parts of Britain.
But interest rate cuts of 3 percentage points by the Reserve Bank of Australia in the past four months are expected to revive the SA market, with agents predicting an increase of up to 10 per cent this year.
Homeowners in Brighton were the winners in the December quarter, with the median value of houses sold rising more than 38 per cent on the previous year to $747,500.
West Lakes homeowners also benefited from a 37 per cent increase to $700,000, while the value of Tea Tree Gully houses sold increased 25 per cent to $368,500.
Brock Harcourts chief executive Greg Moulton said the data showed SA was bucking the national trend.
"What that's telling people is that the overall SA market has continued to grow, so people should be seeing that their fears were wrong," he said.
"A lot of people predicted our capital growth to go down. It hasn't – it's grown, and it should continue to grow."
Adelaide house prices have slowed after last December's 7.7 per cent growth, with a 2.2 per cent fall in September offsetting a similar rise in March.
Professionals SA chief executive Ted Piteo said SA house prices had held their value after 18 per cent growth in 2007.
"The values aren't down, it is the sales that are down," he said.
Only 5279 houses changed hands during the quarter, 32 per cent fewer than a booming December, 2007, quarter.
Mr Moulton said this was due to market uncertainty.
"The number of transactions are down because people are taking longer to make up their minds and it took people a bit of time to realise that interest rates were going to drop even further," Mr Moulton said.
"It takes a good two to three months after the interest rate drop for the flow-on effect to come through, so we won't see the benefit of the drop until the first month or two in 2009. People are reluctant to sell in a falling market so a lot of properties won't come on to the market.
"Also, potential buyers who are concerned about job security are less inclined to commit and enter the property market.
"That is why we are seeing a 30 per cent fall (in transactions), but last year was an absolute bumper.
"(This year) there are going to be some very agitated vendors who will accept low offers but the overall market will be one of continued stability."
SA house prices are forecast to climb between 5 and 10 per cent this year and are tipped to avoid falls expected in other markets.
The value of Victorian property has dropped 5 per cent since July, according to BIS Shrapnel and Sydney prices shrank 3.4 per cent in the September quarter.
But falls in the UK housing market still dwarf Australian figures, with a building society reporting a 34 per cent fall in Northern Ireland and a 16 per cent fall across the British market.
Here, falling interest rates and the Federal Government's $1.5 billion first-home buyers' bonus are expected to bolster the SA market, but not to the 2007 levels.
Mr Piteo said new state legislation about price advertising was expected to inflate prices – a trend expected to offset a slowdown related to uncertainty.
Real Estate Institute of SA president Robin Turner said SA had always performed reasonably well – a pattern he did not expect to change this year.
Quarterly median prices are more volatile than those based on annual sales because they have a smaller sample size
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