Property investors’ prayers answered in City of Churches


As South Australia emerges from the pandemic, Adelaide’s property market continues to outpace almost every other state capital in Australia.

As South Australia emerges from the pandemic, Adelaide’s property market continues to outpace almost every other state capital in Australia.

As Sydney prices fell slightly in February for the first time in 17 months and Melbourne stagnated, February’s CoreLogic national Home Value Index released on Tuesday (1 March) showed Adelaide to be insulated to slowing growth conditions experienced by the other capitals.

Dwelling values were up 1.5 per cent in February and 6.4 per cent over the quarter, placing it second only to Brisbane on both counts.

Just weeks out from the South Australian state election, Committee for Adelaide CEO Bruce Djite has been sharing the organisation’s vision to grow the SA population to two million by 2030, up from 1.37 million now.

The implications for the state’s property market and housing supply would be profound.

“We are seven per cent of our nation’s population, but we want to attract at least 10 per cent of Australia’s total migration intake per annum,” he said.

“We are 5.5 per cent of gross domestic product but we want to attract 12 per cent of foreign direct investment,” he said.

The Committee is calling for a $500 million High Growth Fund to attract capital and talent, creating more jobs and opportunities for investors. 

But migration and all the stimulus it brings could get a boost even earlier as state and international borders are now open and South Australia competes to attract new and returning residents.

Index Results

Source: CoreLogic

National Property Buyers director Katherine Skinner said she expected the international border opening to have more of an impact on the demand for housing than the interstate borders, both for purchases and the extremely tight rental market.

“There have been limited options for international relocations over the past two years, so we are definitely anticipating a strong influx through 2022 of the people finally able to make the move,” Ms Skinner said. 

“We are already seeing lots of clients come on board looking for assistance upon arrival, so this is already starting to filter through.

“Since state borders opened, we have found more interstate buyers are ready to put their plans of relocation into action now there are no restrictions in place. 

“This will without a doubt place extra pressure on demand for the short term,” she said.

Removal of state border restrictions could translate into good news for Adelaide’s retail in the CBD.

Herron Todd White said “cautious optimism” had descended on the city’s retail sector as it continued to perform steadily, with average rents on the rise and strong investor demand.

“It is expected that retail markets will see a recovery as the COVID-19 situation improves, with currently 95 per cent of the South Australian population double-vaccinated and the booster rollout well underway.”

“The recent removal of state border restrictions should provide additional economic support to the retail trade sector as interstate business and travel resumes.”

Momentum maintained

Steady demand for Adelaide’s relatively affordable housing was reflected this week in a record auction clearance rate of 85.4 per cent.

According to CoreLogic, Adelaide recorded the highest preliminary auction clearance rate (85.4 per cent), followed by Canberra (75.7 per cent) and Brisbane (72.7 per cent).  

Adelaide is also leading the pace for gains in units, with a monthly rise of 1.5 per cent for Adelaide, followed by Brisbane (1.4 per cent).

CoreLogic Director of Research Tim Lawless said the cities where housing values are rising more rapidly continue to show a clear lack of available properties to purchase.

“Total listings across Adelaide and Brisbane remain more than 20 per cent lower than a year ago and more than 40 per cent below the previous five-year average.

“Sydney and Melbourne have shown the sharpest slowdown, with Sydney (-0.1 per cent) posting the first decline in housing values since September 2020,” he said.

“Conditions are easing less noticeably across the smaller capitals, especially Adelaide, Brisbane, and Hobart, where housing values rose by more than 1 per cent in February.  

Median price record

The Real Estate Institute of South Australia (REISA) said data from the valuer-general in December 2021 revealed unprecedented double-digit growth in more than 300 suburbs.

REISA CEO Barry Money said the median SA house price increased by a hefty 16.8 per cent from the same December quarter in 2020, reaching a new record of $515,000. The median house price in metropolitan Adelaide reached $600,000.

“Volume-wise we have seen 1100 more houses sold in South Australia in the quarter ending December 2021 than in the same quarter last year,” he said.

Sales of units and apartments were picking up, with close to 700 more units sold in the fourth quarter of 2021 than the corresponding period last year. The median price similarly rose by nearly 8 per cent.

“In metro’ Adelaide, we have experienced an unprecedented 17.6 per cent increase in the median house price year-on-year, with one suburb recording an increase of more than 100 per cent – St Peters recorded a 107.5 per cent lift in the past 12 months – taking the median house price of $1,060,000 to $2,200,000,” Mr Money said.

Ms Skinner said supply was still extremely low, sitting 23.9 per cent lower than this time last year.

“Combined with purchasers looking to lock in low interest rates before they rise at some stage in the near future, low supply is really putting pressure on the property prices to continue heading north,” she said.  

She said she believed demand would continue to outweigh supply for 2022 and add pressure to prices across the board.


Source link

Call Us Now