South Australia and Adelaide have beaten the typical third quarter slowdown, as the latest quarterly data show new record highs for both house and unit prices.
According to the Real Estate Institute of South Australia (REISA), the state’s median house prices posted a 9.66% annual increase and 1.49% quarterly increase over the September quarter.
REISA CEO Barry Money said these results are significant, given the third quarter of the year is traditionally the slowest period for the housing market.
“Once again, vendors undoubtedly are the winners thanks to the new record median price which climbed to $560,000 this quarter across metropolitan Adelaide,” he said.
Beaumont, Bridgewater, and Gulfview Heights are the three suburbs with the highest annual growth rates, up by 89.9%, 85.5%, and 57.4%, respectively.
Sellicks Beach, Smithfield Plains, and Broadview also performed strongly, with price gains going above the state average.
Mr Money said these suburbs consistently recorded elevated housing demand over the past months.
“This is a clear demonstration that the key drivers of buyer and investor sentiment include affordability, development potential and rental return,” he said.
Mr Money said South Australia and Adelaide’s housing markets continue to be a significant consideration for many homebuyers and investors looking to break into the market.
“Investors continue to flock to South Australia attracted by comparatively high rental yields but now strong capital growth,” he said.
“However, limitations in supply alongside favourable macro-economic factors such as interest rates and consumer confidence will continue to drive prices upwards and render housing affordability an ongoing struggle for first-home buyers.”
New record for unit and house prices
Separate research from Domain showed that house and unit prices in Adelaide are now at new record highs.
Over the September quarter, house prices jumped 5.6% to a new record high of $667,888.
Meanwhile, unit prices reached a new record with a 5% gain to $357,615.
The report said house prices in Adelaide increased by $307 daily over the past 12 months to September, which is the largest on record.
“Pressure still remains on buyers as demand outstrips supply and price growth remains positive. But there are signs conditions could be changing as house price growth moderates by one-third compared to last quarter,” the report said.
However, while buying demand remained strong, it appears to be easing as the number of home loan financing started declining from their recent peaks.
On the supply side, the number of homes available for sale declined 28% below the five-year average.
“While conditions remain skewed towards sellers, as new listings track higher and buyer demand eases, supply should begin to normalise,” the report said.
Photo by Gilly Tanabose on Unsplash.