The South Australian property market hasn’t seen the massive jump in values experienced in Melbourne and Sydney but has also avoided rapid slump in prices as seen in Perth
- which makes this market an attractive safe haven for investors
In national terms, the SA market has continued to lag the national property market’s performance. Over the March quarter, median house prices grew by just 1.41% to $402,000 according to Residex. Over the year, it has grown by just 7.56% which is well below the 10.39% annual growth over the past 10 years.
Houses reached a median value of $402,000 in March, according to Residex; REISA president Michael Brock has applauded the price breakthrough.
Australian Property Monitors painted a more upbeat result in its latest data showing Adelaide
as the only major capital to see an increase in the quarterly growth rate for houses in the March quarter compared to the December quarter. Its rate of quarterly growth rose by 3.6% in the three months to March, up from 1.5% in December.
The Real Institute of South Australia showed similar solid results, revealing 14% growth in the median Adelaide house value from March 2009 – a particularly low point for the GFC – to March 2010.
“The median house price has now cracked the $400,000 mark which speaks volumes in itself, and some of the top-end sales have been really pushing the limits,” says REISA CEO Greg Troughton.
“We’ve already had six sales above $3m in the first three months of the year, compared to last year when we had nine for the total calendar year.”
Units in the city are averaging $309,000, with a low 0.93% rise in the month of March and only 0.44% in the quarter, according to Residex. Rental yields are at 4.65% with a median weekly rent of $275.
The author of Top Australian Suburbs,Peter Koulizos, says that although Adelaide has been quiet over the past year, he expects it’s only a matter of time before it really takes off.
“Adelaide has been a sleeper. If you look at most charts from the property houses like RP Data, Adelaide is in the bottom half as far as capital growth is concerned,” he says. “But as I live in Adelaide, I can slowly see things starting to ramp up. I’m very confident about Adelaide.”
Koulizos likens the current state of the Adelaide market to that of pre-boom WA. He says solid foundations and good infrastructure – such as a new light rail system, expressways and a hospital – are being laid down in the southern state.
Rural SA soars
The positive growth achieved in capital was mirrored across the state, according to the REISA, with regional SA achieving 14.6% price increases.
“Usually the flow-on effect takes a little while to reach country areas, so to see such a huge jump in prices during the March quarter definitely exceeded our expectations,” the REISA’s Troughton says.
He adds that houses in the best-performing suburbs of Parkside, Clarence Park and Glenelg
North all recorded capital growth of more than 30% in the year. “These were the regions that took a hit during the GFC, so to see them bouncing back is great news for the overall economic recovery.”
Margaret Lomas, director of Destiny Financial Solutions, suggests that the outer suburbs of Adelaide may also see strong growth as a result of progressive councils and strong population gains.
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