Investors should expect disappointment in Adelaide’s fragmented market, with few new growth drivers on the horizon
With a stagnant job market, Adelaide’s prospects for progress are not bright.
“I know some investors are looking for opportunities in Adelaide, hoping, or speculating, that prices will increase, but there are few growth drivers in Adelaide, which is experiencing about average unemployment rates and poor employment growth,” says Michael Yardney, CEO of Metropole Property Strategists.
Overall, there has been some growth in this market. House prices went up slightly, by 3%, in 2017, whereas unit values rose by just 0.9%.
“The Adelaide market has continued to remain stable on the whole with performance differing greatly depending on location,” Herron Todd White’s Month in Review report for December 2017 states. “Lower supply in inner city areas has resulted in increased demand. Areas that offer a larger number of properties on the market have remained stable. Demand for character style dwellings in proximity to the CBD has continued to remain high due to low stock levels.”
Despite the increased stock of townhouses and units in the suburbs of Prospect and Campbelltown, detached housing remains the property of choice. Even with prices getting a slight boost, Adelaide remains the most affordable capital city based on median house value.
Initiatives designed to improve accessibility and transportation could help enhance the appeal of suburbs that are further from the city. While they are causing problems for those in the vicinity of the Torrens to Torrens roadway, Darlington upgrade and O-Bahn tunnel projects, these plans are providing employment and upgrading existing facilities to improve the outlook for the state.
The suburb of Nairne, located in the Adelaide Hills, is one such suburb benefiting from infrastructure investment.
“Our market analysis suggests Nairne ... is tipped to have above-average price growth in 2018,” says Gregg Harris, NAB South Australia retail general manager.
“House prices in Nairne are set to benefit from nearby infrastructure investment and its close proximity to Mount Barker. Accessibility has been improved with recent South Eastern Freeway and adjoining road upgrades.”
SUBURB TO WATCH
GILBERTON: House values are beyond $1m
The premium suburb of Gilberton, once known as Gilbert Town, saw the median house price pass the $1m mark.
In the 12 months leading up to December 2017, house values rose by 5%. Units experienced less growth at 3.6%, bumping the median price up to $462,510.
Gilberton is the site of many historic Victorian homes. It is only 2km from the Adelaide CBD and its amenities, including several hospitals, schools and pubs. A railway station in the neighbouring suburb of North Adelaide facilitates commutes across the state.
Cycling and walking paths can be found in nearby Torrens Linear Park, which stretches to Henley Beach in the west.
Location: Situated close to the Adelaide CBD, Gilberton has easy access to the city’s amenities
Growth: Gilberton is one of the pockets in Adelaide’s uneven market that have seen prices go up
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