Booming Adelaide promises ongoing value for investors in 2024
Adelaide’s property market in recent weeks has kicked significant value growth goals and local experts say that’s not changing any time soon.
CoreLogic’s newest Home Value Index found the South Australian capital’s dwelling values grew by 1.2 per cent last month, compared to Melbourne and Sydney, which are both down on previous month’s data.
Quarterly growth in Adelaide was 3.9 per cent and 7.6 per cent for the last 12 months.
Tim Lawless, Research Director, CoreLogic, said Adelaide continues to show remarkably low levels of advertised supply while purchasing activity is holding above average levels.
“This imbalance between available supply and demonstrated demand is keeping strong upwards
pressure on housing values across the city,” Mr Lawless said, also describing it as a standout for resilience and rapid pace of growth.
When the auctioneer’s gavel fell last weekend on 190 dwellings, the median price of the houses on offer was $835,000. In the first week of December, Adelaide’s auction clearance rate reached the highest of all capital cities, at 77 per cent.
Adelaide’s top 10: highest 12-month value growth for all dwellings
(Source: CoreLogic)
CoreLogic’s Top 10 areas for the highest 12-month value growth begins with Playford in number one position, up 11.6 per cent, with a median dwelling price of $459,226, followed by Salisbury, Gawler–Two Wells, Port Adelaide West, Adelaide City, Tea Tree Gully, Onkaparinga, Campbelltown, Burnside, and Port Adelaide East.
Of those suburbs, the highest median price is found in Burnside at $1,394,590, which has seen 6.4 per cent value growth. In the $500-$600,000 median value bracket, are Salisbury, Gawler-Two Wells and Adelaide City.
David Ferrari, Principal, Belle Property Glenelg, agrees with Mr Lawless that the market has been a perfect balance of supply and demand since the start of the pandemic, which boosted a surge of interest from interstate investors.
“A lot of investors are buying interstate, because they want to capitalise on this huge capital growth that we’ve had over the last three or four years, and it just seems to be powering on, so some properties are selling and I scratch my head, asking if it sold for how much? I can’t believe it,” Mr Ferrari told API Magazine.
“I think these are the best market conditions I’ve worked in during my 22 years in real estate because there’s a lot more buyers interested in places like Glenelg and Henley Beach than there are properties available.”
Comparable to Bondi and Coogee in Sydney, or Bright and St Kilda in Melbourne; Glenelg and Henley Beach are premium coastal suburbs with beachfront properties.
REISA sales data from the week ending 3 December indicate the type of values appearing in Glenelg East, on Gower Street for $1.7 million, Panorama $2.1 million, Unley $2.7 million and Somerton Park $2.2 million.
Thirty minutes inland from Glenelg, 15 minutes south of Adelaide city and 30 minutes from famous Adelaide Hills wineries, a four-bedroom property with an architecturally designed interior recently sold for $3.1 million in Beaumont.
Figures supplied by the selling realtor, Klemich, say 230 groups attended one week of inspections, the property received 27,324 unique views online and 10,737 interactions with the agency’s social channels.
“There’s very few family homes on the market, and have been for quite some time, so when a nice family home hits the market, there’s strong demand, and that demand is driving competition and competition is driving price and we haven’t seen a downturn in the Adelaide market and, while it’s slowed down, prices are still strong,” Matt Smith, Managing Director, Klemich, and Board member of the Real Estate Institute of South Australia (REISA), told API Magazine.
“There’s an obvious trend of interest extending into Adelaide’s outer areas and the Adelaide Hills too, which is comparable to the Hunter Valley in NSW, as it saw a 17 per cent growth last year versus 10 per cent in metropolitan Adelaide.
“The family homes in those areas are seeing extraordinary results into the $300- to $500,000 mark, but for example, on the weekend, I sold a property in Rosslyn Park, which is a nice family home, but it went $2.7 million and in Adelaide terms that’s quite phenomenal for a family home located a little bit further out of the city.
“I think in part it’s still a hangover from Covid lockdowns where we’ve seen a particular push for more space and fresher air, and it’s led to a significant uplift into the regional areas of South Australia as well,” Mr Smith said.
Adelaide rentals vacancies remain low
Rental vacancies in Adelaide are extremely low.
Mr Smith said Klemich currently has no rental properties and when they do, they are gone as quickly as they come in.
“It is incredible, it’s the lowest I think we’ve seen. The most recent stats I’ve seen there was 0.3 per cent vacancy, which is a record low.”
Mr Ferrari says a lot of people who want to buy are trying to switch to the rental market instead because they can’t purchase and will live, for example, in a caravan park for six to eight weeks waiting to find properties.
“I had clients with a combined income of $200,000 who have sold their house, are trying to buy something, but are priced out of the market now because they just kept missing out on the properties.
“Another person had done five or six building inspections and missed out, so you can imagine spending $500-$700 a pop on a property and then missing out after spending $3,000 on building inspections, so they’re switching to renting.”
Domain data shows suburbs with the highest vacancy rates are Adelaide City (0.6 per cent), Burnside (0.6), Unley (0.6), Adelaide Hills (0.5) and Norwood/Payneham/St Peters (0.5), while Tea Tree Gully, Marion, Port Adelaide East, Salisbury and Onkaparinga are all under 0.2 per cent vacancy.
Original Source API Magazine https://www.apimagazine.com.au/news/article/booming-adelaide-promises-ongoing-value-for-investors-in-2024