Adelaide flies under the radar as one of our strongest capital city property markets: Hotspotting’s

Investors will be piling into the Adelaide market – just as soon as they read somewhere that there’s a boom in the South Australia capital.

But not before. The only constant in the residential property market is that the herd mentality drives the actions of buyers and sellers.

Adelaide right now is a strong value-for-money proposition, with one of the steadiest and most consistent markets in capital city Australia, underpinned by an economy that the experts have recognised as one of the nation’s best.

But investors generally refuse to consider it. Adelaide flies under the radar screen, with many people clinging to the outdated notion that Adelaide and SA is a low-growth sort of place.

But the experts know better. Here’s a snapshot of what some have said recently:

“South Australia’s economy was the standout of all states and territories in the last three months of 2018, with strong house prices and positive employment momentum boding well for the future.” – ANZ Stateometer report

“Residential property capital values in South Australia had their fastest rise for six years in the last financial year.” – SA Property Landscape report from Land Services SA

“Business confidence in SA is now at levels not seen in more than 10 years.” – Business SA William

Buck Survey of Business Expectations

“South Australia remains home to the most confident property sector in the country, buoyed by tax cuts and positive economic announcements. It is the fourth consecutive quarter that confidence in the state’s property industry has topped the country.” – ANZ / Property Council Survey’s Statewide Index

“All the economic indicators are suggesting that Adelaide is going to experience a very buoyant 2019.” – Broadway Property director Ben Heritage

“Price Growth Reaches 6 Year High in Sleeper State” – Smart Property Investment magazine

“Adelaide Median House Value Soars To Record High, Defying Downturn In Other Capital Cities.” – The Advertiser

“Adelaide Housing Market Forecast To See Steady Growth.” – Moody Analytics

“The two key measures of the SA economy – how much production in the state and how much spending in the state – are both accelerating.” – Chris Richardson, Deloitte Access Economics

“Elon Musk’s Tesla is aiming to more than double its battery rollouts during 2019, saying its huge Hornsdale battery in SA has become an important calling card that’s attracting bigger projects.” – The Australian

“Technicolor’s Move To Adelaide Will Generate 400 Jobs and Boost CBD Living and Lifestyle.” – The Advertiser

Against that background of economic and property performance, Adelaide is one of Australia’s most consistent markets, a status it has maintained over the past 12 months. It remains the busiest market in capital city Australia and one that is forecast by several analysts to be a national leader on price growth in 2019 and beyond.

SA, dominated by Adelaide, has impressed with its steady performance in the past five years. Each of the past 20 quarters has recorded between 8,000 and 9,500 dwelling sales. Adelaide continues to record high numbers of suburbs with growing sales demand, well above the levels seen in most of the capital cities.

This has produced multiple years of steady price growth, without generating a price boom – yet.

While sources such as CoreLogic and SQM Research report annual growth of only a few percent in Adelaide house prices overall, these generalised figures disguise individual areas which have done better.

It’s noteworthy that many of the millionaire suburbs have recorded big growth in their median prices in past 12 months. Uplift in the premium market is often an early signal of a market upcycle.

The growth is not all confined to the top end: there are suburbs with growth above 10% spread across all price ranges. This reinforces the reality that out-performing areas can be found even when the overall market appears to be moderate.

Adelaide has a broad geographical spread of LGAs with good numbers of growth markets. There are seven municipalities which have five or more suburbs with rising sales trajectories leading to price growth. This means there is growth momentum across the metropolitan area.

The leading precinct, with 12 growth suburbs (which makes it a nation-leading market), is Port Adelaide Enfield – which is likely to attract growing interest as the massive project to build Navy vessels unfolds.

The Marion LGA, a middle-market area in the south-west of Adelaide, has been a market leader for the past 12-18 months and continues to be.

A new challenger in Adelaide is the West Torrens LGA, which is situated between the CBD and the beaches – and offers wonderful value for money, relative to its location. Most suburbs have median house prices in the $500000s.

Another contender is the Tea Tree Gully LGA, which offers a good location relative to major jobs nodes and the Adelaide CBD, good local infrastructure and a high level of housing affordability.

Source: Metricon 26th April 2019