Adelaide's housing market continues to be highly competitive, as demand continues to overwhelm the limited supply of homes, according to the latest report from Domain.
The strong demand for housing in the capital city has resulted in the steepest annual growth in house prices since mid-2010. Over the quarter, house values increased to $599,706.
Adelaide south was the only region to record a double-digit annual house price gain at 11.6%.
"Adelaide is the third most affordable city to purchase a house, behind Perth and Darwin. For the first time on record, it is now more affordable to purchase a house in Adelaide than Hobart," said Nicola Powell, senior research analyst at Domain.
Unit prices increased by 6.9% annually to $344,062. However, the pace at which unit prices are growing appears to be slowing down.
Units in Adelaide’s south have seen the strongest rates of price growth both over the quarter and year, while most other areas are starting to soften marginally.
Powell said current sale transactions for houses and units are at the highest level since 2007. The supply of homes has not been able to keep pace with buyer demand, creating a competitive environment that the market has not experienced in some time.
"Adelaide has always largely been an owner-occupier-driven market, therefore less exposed to the retreat of investors. That said, investors are starting to return, and the lower purchasing price, tight rental market and ending of the rental moratorium could draw more investment activity to South Australia," she said.
