Adelaide has always been a subdued market; free from the volatility of some of Australia’s other capitals. Property movements are thoughtful and gradual, like the tortoise to the resource states’ hares.

When the Olympic Dam project was still on the verge of getting underway, South Australia was poised to join its western and northern brothers on the positive side of the national economic average. However, it has stalled and so Adelaide returns to its subdued state.

“Olympic Dam has flattened confidence in South Australia to some degree,” says Andrew Wilson, senior economist at Australian Property Monitors. “There has been no sense of any revival in house prices this year. They’re still moving south; not collapsing, but without a lot happening.”

Like a lot of the other states, Wilson says Adelaide has seen some bargain hunting in traditionally higher priced suburbs where value opportunities have come to the fore, but the city of churches is currently bound to play follow the leader for the next year or so.

“I think Adelaide will follow the rest of the country as it moves forward next year,” Wilson says. “But it will be a laggard in terms of that recovery scenario.”

Help wanted

For confidence to return to the Adelaide market, commentators agree that someone needs to kick start the economy.

“Adelaide needs more investment. It’s lacking some of the necessary drivers, until something happens,” says Andrew Peterson, from The Next Hot Spot. “Had Olympic Dam got over the line, South Australia would have gone from a have not to a have. That’s a 100 year project, so delaying it by four or five years, in the short term, is damaging.”

After missing out on such a considerable boost, the state government has put out the ‘help wanted’ sign.

“They’ve said they’re open for business,” says Peterson. “They know they can’t afford to develop infrastructure themselves, so they are looking for private investors. In the week that BHP pulled their heads in on Olympic Dam, Rio Tinto got into bed with a company called Tasman Resources, which is exploring the Vulcan site, next door to Olympic Dam. Their initial report is that they’re getting the same positive results.”

Peterson says the corporate competition between BHP and Rio has been fuelled further by the state government’s dedication to resource projects.

“[Premier] Weatherill has come out and released Woomera for exploration, which has still got some lingering Indigenous rights issues that need to be sorted out,” he says. “They’ve made it very clear, saying ‘we need the business, we have the resources, they will be developed, here you go, now get into it’. I think [BHP are] making the end result bigger, because it’s stimulated the government and competitors into thinking ‘let’s have a crack at this’.”

Big name makes a move

One investor to take interest in the city of churches recently has been billionaire property developer Lang Walker. According to Peterson, Walker has set his sights on a project in the trendy O’Connell St precinct of North Adelaide.

“He has gone into a mixed use development on a block that’s been vacant for 10 years and if you look at a guy like Walker, he doesn’t do too many deals against his own interests,” says Peterson. “It’s a $200 million project and that’s a good sign for me. It’s good circumstantial evidence when people like that are putting their dough in there.”