SA Excerpt from the 2020 April Market report

By Jacqueline So | 01 Apr 2020

Adelaide is maintaining the momentum it began picking up in the latter half of 2019, as the findings of the ANZ/Property Council Survey for March 2020 indicate. Consumer sentiment towards the SA market is quite high, as are house price expectations.

In fact, many investors are picking Adelaide over former top player Hobart when it comes to capital cities with growth potential over the next five years. Supply also looks to be staying low, which along with the affordability of properties could help build demand.

CoreLogic’s Home Value Index for December 2019 noted that it was the lower quartile of Adelaide’s market that was drawing buyers, with prices rising by 1.9% over the year.

“South Australia offers a quieter lifestyle, and due to a couple of key infrastructure projects, some areas are likely to experience growth,” says Dennis Wong, property data research specialist at Real Estate Investar.

“Projects such as Adelaide’s North-South Corridor will provide easier access and an increase in job numbers once the office building and retail spaces from the Adelaide Festival Plaza redevelopment are completed by 2022.”

Accompanying the infrastructure development initiatives is a burgeoning rental market characterised by strong yields and tight vacancy rates.

“Rental yields in SA are much more attractive than in NSW and Victoria – SQM reported healthy vacancy rates for October 2019, with Adelaide at 0.8%, and this rate has been declining since its peak in November 2016 at 2.1%,” Wong reports.

“Rental conditions are attractive for investors in South Australia and much more affordable, with the median house price in the $400,000s and the median unit price in the $300,000s.”

The Domain Rental Report for Q4 2019 adds that, over the year, the rental rates for both houses and units in Adelaide rose slightly. This means that in the last three years property rents have gone up by nearly 10%, making Adelaide the third-fastest-growing rental market among the capital cities. It also suggests this market is heating up.

With the employment situation improving and the population trickling back in, SA is on track to deliver on the potential that investors are now seeing. 

Units can’t catch up with houses

In addition to boasting low median property prices of $405,675 for houses and just over $250,000 for units, the suburb of St Agnes in northeastern Adelaide also offers reasonable rental returns, at 4.7% and 5.4% for houses and units, respectively.

However, while houses have been on a steady uptick in the five years to December 2019, units have been going in the opposite direction.

Owner-occupiers make up more than 80% of the population in this suburb, with many being at retirement age. Nonetheless, there are several schools in the area for families with young children, such as St Agnes Primary School and Ardtornish Primary School.

Demographic: Owner-occupiers comprise more than 80% of the population in St Agnes

Affordability: Both houses and units are reasonably priced at around $400k and $250k, respectively

Top Suburbs : harris park , padbury , artarmon , bligh park , menai


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