Adelaide Property market may have finally started to trend upwards and show signs it may be in for a period of sustained growth in 2018.
Some property investors might consider the Adelaide property market a little on the slow side, with the median increasing just 49.8 per cent from $287,000 in 2006 to the current high-point of $430,000, but few investors are getting burnt along the way. The median house price jumped sharply to $323,000 in 2007 and then grew strongly again to $362,500 the following year but hardly moved from $375,000 to $395,000 between 2009 and 2013.
Adelaide has experienced something of a recovery since then but hardly in the mould of a Sydney and Melbourne and that’s the way it’s expected to continue to perform in 2018 – steadily, reliably and slowly.
The latest Real Estate Institute of South Australia (REISA) figures show a steady four per cent growth across the Adelaide metropolitan area, with the major compass points of Glenelg, Norwood and Modbury all doing well. Norwood’s huge growth in recent years continued again during 2015, jumping an unprecedented 60 per cent to $1.25 million. While the September 2015 figures show a drop for the CBD and Unley, most experts believe this is just a correction that will sort itself out in the next 12 months before both areas achieve growth.
Unley is expected to rebound from its nine per cent drop last year and, like the CBD, its negative numbers can be put down to low sales volumes. The same can be said about elite inner northern suburb Medindie, which plummeted 32 per cent from $1.54 million to $1.04 million in the past year. While low volumes could be a contributing factor, some well-funded buyers are shying away from the exclusive but insulated enclave in favour of locations offering lifestyle, coffee shops and restaurants.
REISA present, Alexander Ouwens, says that while the market isn’t setting any records, it’s underpinning a large slice of the South Australian economy and should experience increased growth over the next 12 months. He says people have confidence in the Adelaide property market and in particular knowing their investment is a secure one.
“Property is definitely the favourite industry in South Australia and I’d expect growth of about five to six per cent across the Adelaide metropolitan market over the next 12 months,” Ouwens says.
“Auction clearance rates are now starting to slip into the 70 per cent range, which is positive, and we’re starting to see some real depth at the auctions.
With the Melbourne and Sydney property markets overheating and now starting to come off, we’re seeing more and more interstate and overseas buyers looking at Adelaide. It’s starting to head towards a sellers’ market and heading in the right direction.”
“The amount of listings has been down lately but the market is very stable. We haven’t had the same cross-market strength of Melbourne and Sydney over the past 12 months but it’s evening out to be quite a steady market. The price point in the inner-metro area of the second homeowners moving up is starting to mesh with the baby boomers looking to downsize, so there’s this crossover of markets taking place in that $600,000 to million-dollar bracket.”
“With the gen-X moving up and the baby boomers moving down, that market has been very strong from a dollar-specific point of view. The absolute top-end of the market, which in Adelaide is the $2 million to $5 million range, hasn’t been as buoyant so far in 2018 as the last time the market was increasing in 2010. The shutdown of some big corporations, which has taken some CEOs and general managers away from Adelaide, has had an impact but there’s still some depth to the market.”
“I think that as the new corridors develop, the Adelaide property market will grow stronger than its current rate but the one good thing about Adelaide investment property is that it doesn’t have too many sudden drops.”