Adelaide’s affordable prices are driving its strong performance in the national market as it joins Hobart and Canberra at the top
It’s not the big boomer that Hobart is, but Adelaide’s low property prices are making it a hit among buyers.
CoreLogic’s Hedonic Home Value Index report for March 2019 showed that, alongside Hobart, Canberra and Brisbane, Adelaide had the best housing market conditions among the capital cities. In the face of tight lending criteria, it’s the affordable markets that are starting to hold court.
Indeed, while Adelaide’s house prices increased by an annual rate of 0.9%, the majority of properties sold in the city over 2018 were in the $200,000–$400,000 price range, while 5.3% of sold properties were priced under $200,000. Outside of Adelaide, a whopping 32.2% of sales were of properties costing less than $200,000.
Nonetheless, Adelaide is still a divided market in which some areas perform better than others.
“South Australia is similar to Brisbane in its diversity of market conditions at the moment. There are some very positive signs in some areas and dismal signs in others,” says Jeremy Sheppard, head of research at Select Residential Property.
“Investors prepared to pick carefully amongst some of Adelaide’s finest will have a rewarding 2019.”
However, Sheppard warns against considering areas like Whyalla and Port Augusta, as supply heavily overrides demand.
“Hopefully a turnaround in the resources sector will help these markets crawl out of their doldrums soon.”
Good for developments
Results Mentoring director Brendan Kelly agrees that Adelaide’s market is quite similar to Brisbane’s – where the annual growth rate was 5% five years ago, it has since fallen to near 0%. Nonetheless, modest growth is still there.
“There is a reasonable amount of growth in Adelaide still – across the country, it’s probably the premier city for doing developments,” Kelly says.
“There’s a lot happening in Adelaide right now for developments, like small three-to four-unit developments. I’m anticipating an increase in the number of both growth and declining suburbs – some suburbs go down further, while others climb.”
With these movements essentially cancelling each other out, Kelly doesn’t see them having a significant impact on the market, but they will shake things up.
“The effect is near zero, but the market will be more volatile in the next 12 months.”
SUBURB TO WATCH
WARRADALE: Convenience, affordability and growth
Part of the city of Marion in Adelaide’s southwest, the suburb of Warradale offers convenient access to the Adelaide CBD while providing steady, if gentle, growth potential.
Units came in at a low median value of under $350,000 as of February 2019, even after five years of consistent price increases. Houses logged a median price of just over $550,000 following a 1.5% rise in values over the past 12 months.
The suburb got its name from an Aboriginal word for timber. Pockets of Warradale lie within the school zones of Brighton High School, Seaview High, and Hamilton High. The Seaford-Tonsley train line passes through this suburb as well.
Accessibility: Warradale is close to schools and public transport, as well as the Adelaide CBD
Affordability: Units can still be purchased at a low median value of less than $350,000