As the cream rises to the top, Adelaide is finally going from a ‘middle of the pack’ capital city to one with excellent prospects in the new decade.
Brett Roenfeldt, president of the Real Estate Institute of SA (REISA), points to the peaking median dwelling price and the strong sales over the last quarter of 2019.
“We have another record-breaking median price at $485,000, which is a 2.11% increase from the previous quarter and a fantastic 1.73% increase from the same quarter last year,” he says in REISA’s 4th Quarter Market Update.
“The volume of sales recorded this quarter is nothing short of breathtaking and illustrates that more stock is beginning to appear on the market and that investors and buyers are entering the market and purchasing stock that is affordable and realistically priced.”
Indeed, affordability has become a deal-breaker for many investors, especially with the high prices in cities like Sydney and Melbourne. However, the top-performing suburbs in SA offer not just low-priced properties but a good location and growth potential. Some of these suburbs include Norwood, Torrensville, Evanston Park and Rosewater. Morphett Vale also remained the top seller.
“The key drivers of purchaser spending are affordability, location and the opportunity of investment. The consistently top-performing suburbs in these lists are those that offer all three drivers,” says Roenfeldt.
Limited supply has played a role in how Adelaide is perceived now. CoreLogic’s Home Value Index for January 2020 showed that Adelaide was one of the tightest capital city rental markets in the country, and this caused rents to shoot up by 2% over the last year. This was one of the highest rent increases recorded by Australia’s capital cities, second only to Hobart’s.
“The rent has been consistently rising in Adelaide for a while. What’s driving it is probably modest population growth – there’s been minimal construction going on, and the vacancy rate is low at 1%,” says Domain economist Trent Wiltshire.
However, SA investors shouldn’t get too excited and throw all their eggs into this basket just yet, he adds.
“There has been a smaller rise in home loan commitments in SA since mid-2019 than in other states, which points to a more modest rebound in 2020.”
SUBURB TO WATCH
WINDSOR GARDENS:
The suburb of Windsor Gardens in northeast Adelaide saw its property market stumble in the year to February 2020 as prices of both houses and units declined. Houses fell by 2.4%, dropping the median value to just $462,017. Unit prices dipped by 8.3% to a median of under $250,000.
Windsor Gardens quite close to the CBD, making it an excellent base for those seeking affordability. It is dominated by owner-occupiers, putting a strong floor under demand, and investors in units can profit well, with rental returns averaging 6.1%. Schools in this area include Avenues College and St Pius X School.
Location: A northeastern Adelaide suburb, Windsor Gardens is conveniently closeto the CBD
Schools: There are good options for local education, includingAvenues College and St Pius X Schoo
