Adelaide gains some forward momentum as the declining markets in Melbourne and Sydney cause investors to look elsewhere
While the downturn of Australia’s two biggest capitals has led to a nationwide dip in the property market, there are other markets that have been able to benefit in some way. One of these is Adelaide.
“When you have people not wanting so much to purchase in Melbourne and Sydney, they will start to look at the smaller capitals like Hobart and Adelaide because the real estate’s still affordable,” says Real Estate Institute of Australia president Adrian Kelly.
“If you’re buying for investment purposes, the rental returns are much higher than what you’ll get in the other big capital cities.”
Adelaide is one of the most affordable capital cities in the country, with properties at the lower price points predicted to perform well. According to Herron Todd White’s Month in Review report for February 2019, middlering suburbs like Hope Valley, Ingle Farm and Dover Gardens are potential hotspots this year. These markets offer properties within the $300,000–$500,000 price range and are ideal for first home buyers and investors who want to limit their reliance on lenders.
Buyers do need to keep a healthy distance from high-priced suburbs at this point, as lending restrictions are still expected to affect the Adelaide market. The difficulty of getting finance and the declining auction clearance rates both signify a premium market that’s losing traction.
Adelaide holds steady
While it does not experience the great highs of Sydney, Melbourne, Hobart and the like, what Adelaide has going for it is consistency, which protects it against significant market movement.
The SA Property Landscape report for February 2019 indicates that in 2018 the capital values of residential properties rose by 5.9%. This is the most significant boost since 2002. Individually, the Campbelltown City Council recorded the highest increase in residential land capital values of 9.75%. However, sales volumes were down across the state, with Burnside City seeing the biggest drop.
The number of first home buyer finance commitments increased by 2.3% in the 12 months to December 2018; however, the figure fell by as much as 6.4% in the November–December period. Coming in at a total of 495 as of December 2018, this is the lowest number of commitments since July 2018.
SUBURB TO WATCH
MOUNT BARKER: Affordability in Adelaide Hills
One of the service centres of the Adelaide Hills region, the suburb of Mount Barker is seeing renewed demand in the housing market, which is bringing positivity back.
In 2016, house prices slipped by 1%, but in the 12 months to January 2019 values bounced back beautifully with an increase of 5.8% to a median of $411,727. At under $450,000, this makes the housing market quite low priced – something that Adelaide as a whole is fast becoming known for. This affordability extends to the unit market, which has a median price of $274,949 following a 3.6% rise in values. Unlike the house market, however, units have been consistently in the black since 2014.
Amenities: Mount Barker is one of the main service centres in the Adelaide Hills region
Affordability: The suburb offers low-priced properties in both the house and unit markets
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