Adelaide emerged as the superstar of the national property market last year and there is every indication it will hold its stellar status in 2008.
The Real Estate Institute of South Australia (REISA) claims 2007 was the biggest year Adelaide has ever had for residential property transactions and more than 100 suburbs recorded greater than 20% growth in the 12 months to December. While that may seem like a hard act to follow, property commentator and director of hotspotting.com, Terry Ryder says he believes it will remain the stand-out capital city in terms of property performance for 2008 as well.
Ryder has been watching SA closely since he pegged it as the market with the most potential in early 2007. His predictions well and truly came to pass with annual price growth at its highest level since 2004 and subsequently Ryder’s SA hotspot report has become his hottest product. Yet again this year he has tipped Adelaide as the capital with the most room to move. “Most markets will see lesser growth as we see the fundamentals tighten up but Adelaide still has the capacity to show good growth,” he says.
Residex figures released for the first quarter of 2008 prove his point. It was again the highest performing capital city in terms of price growth with a rate of 4.25%. Even so, the current median house price is only $368,000.
“It is the cheapest mainland capital city so it is relatively affordable and it has some major drivers pushing the market along which South Australia has not had before,” says Ryder.
The four main drivers, according to Ryder, include:
- The resource sector which is just gearing up and getting toward the construction phase which is what drove the boom in WA.
- The multi-billion dollar defence projects contracts that are likely to boost demand housing for workers
- Population growth. The SA government has actively chased the overseas migrant market that historically has been associated with Melbourne and that is boosting the population growth even further.
- Education. South Australia does have a very proactive government which is determined to see the state rise above the ‘poor cousin’ status that it may have had in the past and one market they have chased with some success is education with a number of overseas institutions opening their first Australian campuses in SA and of course this creates rental demand from students.