Adelaide is gaining a reputation as one of the most steady property markets in Australia heading into 2019
With its remarkable affordability and a rising economy, things may be coming up roses for Adelaide.
“It is a very popular location for investors. You can buy a small cottage that’s very well located for well under $750,000, which is the price point that most investors tend to be looking at. This affordability element makes this a popular destination for investors,” says REA Group chief economist Nerida Conisbee.
“The affordability does make it an attractive city for people who are wanting to start new businesses.”
The city is picking up some major defence projects, and this, along with the rise of the submarine manufacturing sector, has helped to pull up the economy following the downswing of car manufacturing.
“[These sectors] seem to be driving quite a bit of rental demand in Adelaide, so it’s partly due to job growth and partly affordability, [given that] the defence projects are massive and take a long time to implement,” Conisbee says.
In addition to these economic boosters, Herron Todd White’s Month in Review report for December 2018 highlights ongoing efforts to improve infrastructure. Some road projects due for completion shortly are the South Road Torrens to Torrens and the Darlington Upgrade. Other works are in process to further improve road links across Greater Adelaide.
Consistency in a shaky market
One thing Adelaide certainly has going for it is its steadiness amid the current turmoil in the national property market.
“Adelaide is not going to see double-digit price growth – it’s not that sort of market. But it is a steady market. If you’re someone who’s after steady capital [growth], if you’re after the ability to buy a pretty good quality home at a relatively affordable price, then Adelaide is definitely worth a look,” Conisbee says.
According to Propertyology, pockets of the market are seeing price growth even with slow population growth, such as the suburb of Berri.
“Adelaide has had a terrific year when compared to the larger states, and I would be surprised if it doesn’t post a solid 5%-plus growth number,” says Century 21 Australasia chairman and owner Charles Tarbey.
“The city seems to be well planned, and there is a nice balance between supply and demand which may serve the market well going forward.”
SUBURB TO WATCH
SALISBURY EAST: Adelaide suburb on the upswing
Adelaide is considered one of Australia’s most consistent markets. Salisbury East, one of the city’s outer suburbs, has reported gentle growth in the five years to December 2018, taking the median prices of houses and units to over $300,000 and $200,000, respectively.
These affordable values invite interest from buyers. Houses stayed on the market for only 48 days in the year to October 2018, while units took a bit longer to sell, at 61 days. Rental rates have also gone up: the unit market has recorded a healthy boost of 16.2%, pushing the average weekly rent up to $430, which matches the rental rate for houses. The average rental return for units is a reasonable 4.2%.
Affordability: Houses and units are both a affordably priced at a median of $309,482 and $215,724, respectively
Growth: Salisbury East has seen consistent growth in property values over the past five years
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