Dwelling values remained resilient despite the market slowing down, said Jarrod Harper, local expert at Herron Todd White. In fact, figures from CoreLogic show that values in Adelaide rose by 0.4% in May, defying the downtrend across other capital cities.
However, homes in the city stay in the market for longer at 54 days on average. This is higher than the 45 days-on-market last year. Listing volumes also trended lower.
Harper said the slow market helped shift the focus of homeowners and investors to renovation works.
"With an uncertain sales market, we may, in the short term, begin to see a trend where homeowners renovate what they have instead of seeking something else. This coupled with record low interest rates may provide the perfect excuse to get a project moving,” he said.
For investors, the main motivation to renovate is boosting the appeal of their rental property, especially amid the slow market.
"Investors seek out properties with good bones that need as little capital outlay as possible. Simply put, owner-occupiers will attempt to fulfil both wants and needs while investors look to fulfil needs," Harper said.
Stock shortage in Adelaide
Competition may be starting to heat up in Adelaide as the COVID-19 restrictions are gradually being lifted.
Katherine Skinner, South Australian director at National Property Buyers, said Adelaide could be witnessing competition due to several factors.
"There is a critical shortage of stock across all markets and areas. Combine this with such low interest rates, and there is significant competition for homes that would normally not see such levels in normal circumstances," she said.
Figures from CoreLogic show that the median value of homes in Adelaide grew by 0.4 percent in May, defying the overall downturn. It is one of the three capital cities that registered an increase in median house prices in the month.
Skinner said during the second half of May, interest from investors in eastern states increased. However, they are facing increased competition as owner-occupier sentiments also improve.
"This is ensuring the market remain buoyant with many first-home buyers looking to break into the market, as well as owner-occupiers, which are making things more challenging for investors looking to find quality stock," she said.
