Adelaide vacillates between a market that is met with apathy and one with the promise of growth
With affordability becoming such a major issue in capital cities like Sydney and Melbourne, Adelaide’s low-priced properties have surfaced as an alternative for investors and first home buyers alike.
“South Australian first home buyers are paying up to $500,000 less than their Melbourne and Sydney counterparts when they take the plunge and enter the property market,” says Gregg Harris, general manager of NAB Retail SA.
“If spent wisely, $400,000 to $600,000 can buy a modern four-bedroom family home on a large block of land, within a short commute to the CBD.”
According to CoreLogic, over a third of properties in Adelaide are priced within this range, while over a quarter are priced between $200,000 and $400,000. This could be the push the market needs.
“The state’s northern suburbs are seeing many housing developments underway. It’s a hotspot for first home buyers and property investors, as many newly built homes provide low maintenance accommodation options,” Harris points out.
“[However,] there’s [also] much to like about Adelaide’s southern suburbs. The region is home to some of the country’s most enviable coastlines. It is a highly liveable area with accessible local infrastructure, including shopping centres, health care centres and schools.”
However, Jane Slack-Smith, director of Investors Choice Mortgages, warns against diving head first into the Adelaide market.
“South Australia still has a lot of its economic success linked to the mining industry, and it may be just getting a surge of attention at the moment. But the long-term fundamentals mean you really need to do your research to scout out the money-making opportunities,” she says.
‘Not a market to ignore or notice’
While Charles Tarbey, the chairman and owner of Century 21 Australasia, does acknowledge that SA’s economy has struggled since the closure of major plants and industries, he holds a more positive view of Adelaide’s growth prospects.
“As of the end of May, dwelling values were up 0.8% over the month and 2% over the quarter,” he says.
“The South Australian market is one that is well balanced in terms of demand and supply and holds the promise of steady growth. Investors looking to purchase property may benefit from this stability.”
For Nerida Conisbee, chief economist at REA Group, Adelaide is a market that’s in the middle of the pack.
“It’s never a strong or weak performer, and always had low growth. [There are] no high levels of volatility or growth – [it’s] not a market to ignore or notice,” she comments.
SUBURB TO WATCH
COLLINSWOOD: Adelaide suburb strongly favours houses
Located along the boundary of the Prospect and Port Adelaide Enfield LGAs, the suburb of Collinswood is experiencing a strong demand for houses.
This market recorded more than 13% growth over the past year, pushing prices well above the $750,000 mark. This follows a positive growth trend observed over the recent five-year period.
By contrast, the unit market has been flat to declining in the past decade. Values dropped by 2% in the past year, pulling the median price down to just $309,150.
The studios of the Australian Broadcasting Corporation are located in Collinswood, which could be a source of employment. Moreover, the suburb is only about 15 minutes from the Adelaide CBD.