Glimmers of growth in Adelaide’s fragmented market highlight its potential for an upswing
Adelaide seems to embody the fragmentation of the property market across all states.
“Like Brisbane and Sydney, Adelaide’s property market has tremendous diversity of supply and demand. The difference between the best and worst markets is quite significant,” says Jeremy Sheppard, director of research at Empower Wealth.
The capital city’s demand-tosupply ratio has been inching forward, if gently (from a score of 53 in 2016 to 59 two years later), suggesting that demand remains just ahead of supply. Auction clearance rates have been high as well. However, growth has not been significant.
“I’ve noticed that properties closer to the CBD are offering better prospects. This makes sense given the stage of the growth cycle Adelaide is in,” says Sheppard.
“Torrensville, Goodwood and Edwardstown houses all have quick selling times, low stock on market, exceptional interest from would-be buyers, high market cycle timing probability and high ripple effect potential.”
By contrast, supply is greater than demand in Direk’s house market and in the apartment market of Christies Beach.
A strong upswing
In a few more years, however, Adelaide could be one of the top growers in the national market.
“With modest house price growth and a strengthening rental market, the [NAB Residential Property Survey] shows strong property market sentiment in SA,” says Gregg Harris, general manager of NAB retail SA.
The study reports that confidence in SA’s property market has increased. Notably, respondents to the survey indicated that they believed in the state’s long-term potential.
“The general consensus from discussions with our customers is that they are optimistic about one day purchasing their own home. But, according to property professionals, tight credit is the biggest constraint for new housing development, while housing affordability is considered a challenge for buyers,” Harris says.
However, Propertyology managing director Simon Pressley says Burnside City, a highperforming premium suburb, highlights SA’s potential. He also considers infrastructure projects in the pipeline for Port Augusta to be another positive sign.
“With the recent announcement by BHP to increase production at Olympic Dam, the region’s economy has a lot to look forward to. When one considers that a typical house in Port Augusta only costs $200,000, there’s a big upside,” Pressley says.
SUBURB TO WATCH
HOLDEN HILL: Houses on an upward trajectory
A suburb in the inner northeast of Adelaide, Holden Hill has an uneven market that leans towards houses.
House values rose by 6.6% in the year to June 2018, and the median price hit the $400,000 mark. On the flip side, unit values fell below $250,000, with a negative growth rate of -0.3%, continuing a downward trend observed in 2015.
In Holden Hill, Kildare College caters to female students, from primary school to high school. The suburb is favoured for its choice location near the shopping hubs of Tea Tree Plaza and Gilles Plains Shopping Centre. The Linear Park cycling track to Adelaide via the Torrens Catchment is also close by.
Location: Holden Hill is close to the shopping districts of Tea Tree Plaza and Gilles Plains
Affordability: Both houses and units are priced low in this suburb