A boost to Adelaide’s office market could mean good things for SA’s economy and the residential property market
Adelaide has been facing questions regarding its economic prospects since the shutdown of the car manufacturing industry, but a recent report in Knight Frank’s Adelaide CBD Office Market – Overview for September 2018 suggests things are looking up.
“A lack of recent development completions has helped the vacancy rate turn the corner and begin to fall,” says Ben Burston, head of research and consulting at Knight Frank.
“This coupled with an increase in demand driven by business expansions and new tenants in the defence, engineering and non-profit sectors has contributed to increasing rent, particularly in the prime market.”
This activity is indicative of rising interest from investors, with the elimination of stamp duty on commercial properties attracting attention locally and interstate.
“Reflecting increased investor confidence and improving leasing market conditions, [commercial property] yields across the CBD continue to firm,” Burston says.
With employment opportunities increasing, Adelaide could see the population growing, pumping up the residential market.
2019 forecast to be a good year for Adelaide
With great economic prospects on the horizon, expectations are high with regard to residential properties. In fact, the NAB Residential Property Index predicts SA will experience growth over 2019–20, solidifying Adelaide’s reputation as a steady hand in the national market.
“Adelaide house and unit prices are tipped to edge slightly higher against a backdrop of orderly correction in other capital cities,” says Gregg Harris, general manager of NAB retail SA.
“NAB and CoreLogic data have Adelaide on track for just under 1% growth in house prices in 2018 before picking back up to 1.7% annually over the next 24 months. Unit prices are expected to continue along the slow and steady course, rising by 0.5% annually.”
The main buyers of both new and established housing are owner-occupiers, with foreign buyer activity easing up.
“Owner-occupiers accounted for 40% of new property purchases in SA for the third quarter of 2018, and for almost half of established housing purchases,” Harris says.
“First home buyers remain key players in the market, while the share of sales to foreign buyers has fallen in line with other states.”
SUBURB TO WATCH
PORT LINCOLN: Prices sink in seafood capital
A waterside paradise on SA’s Southern Eyre Peninsula, Port Lincoln is regarded as the seafood capital of the country.
The suburb has Australia’s biggest commercial fishing fleet, which brings in some of the best seafood on the planet. Culinary tours are held here as one of the many activities visitors can enjoy, along with fishing, shark cage diving and swimming with sea lions. The suburb is known for its wine culture as well.
Despite its popularity with tourists, however, Port Lincoln is less popular with buyers, as prices of both houses and units fell considerably over the 12 months to November 2018. However, units have shown the bigger fall, at double-digit negative growth.
Tourism: Port Lincoln is highly popular with visitors who enjoy the many coastal activities
Growth: Property values have dropped signifi cantly, especially in the unit market