Population and economic woes continue to plague Adelaide, but it's expected to maintain low but positive growth
Adelaide remains nestled in the middle of national property market, neither recording remarkable growth nor significant decline.
“Adelaide will keep ticking on with low to mid-single-digit growth. Probably the worst has passed in terms of population outflow, but it’s still losing population,” says Angie Zigomanis, senior manager of residential property at BIS Oxford Economics.
“It’s not gaining an increased share of overseas migration flow, so the market’s still pretty soft. Unless there’s a big turnaround in employment, we expect it to keep plodding along as it has been.”
Zigomanis acknowledges the effort made in Adelaide to improve its economic through infrastructure projects like road and rail upgrades.
“In a few years’ time, there’ll also be things like defence spending and what have you. So there is more upside, it’s just that it won’t necessarily come through immediately,” he advises.
Houses are the property of choice here, as this market is stable – it’s all about location.
“If we look for locations people want to be in, it tends to be the inner suburbs, particularly Unley, Adelaide Hills, Crafers – places close to the Adelaide CBD,” says Nerida Conisbee, chief economist at REA Group.
“Adelaide’s brain drain is nothing new – it loses people, and that’s the challenge. Adelaide’s never a strong market in the same vein as Melbourne and Sydney or even Hobart at the moment.”
For Conisbee, there’s nothing to suggest that Adelaide’s fortunes will turn around in the next few years.
Possible dark horse
Caifu Property head of acquisitions Damien Lee sees things differently and has Adelaide pegged as the next big thing.
“Adelaide is going to be very good from an affordability point of view, and it’s still got a lot of different trade going for it – it’s a very big agricultural state, very big resource space, very big education space,” Lee explains.
“There’s been talk about bigger businesses coming back in there, like the development of the submarine navy yard. The hospital’s going into play. So I like Adelaide’s potential as growth moves into smaller markets.”
Low prices are going to be the main factor spurring possible growth, he adds. “South Australia in terms of affordability has a lot of legs to go on over the next 10 years.”
SUBURB TO WATCH
GLENUNGA: High-priced suburb surges forward
The suburb of Gelnunga, 5km south of the Adelaide CBD, maintained a strong growth trend over the five years to February 2018.
House have prices shot up by 15.9% in the last 12 months, with the median value passing the $1m mark. Meanwhile, unit values increased by almost 13% and the median price came close to $450,000.
Apartments spend an average of just 49 days on the market before being sold at an average discount of 4.4%. This could be attributed in part of Glenunga’s excellent location. It is also a very accessible suburb that’s bordered by several roads and serviced by Adelaide Metro buses.
Accessibility: Public transportation by bus from Glenunga to Adelaide is easy
Growth: Houses and unit values both rose by over 10% in the last 12 months
Can you afford to buy in this suburb? Find out how much you can borrow