The Adelaide property market was a quiet performer in 2007, with real estate values slowly edging up in the first half of the year, before gaining momentum to record almost 18% annual capital growth. The December quarter Residex figures also show that regional SA experienced above-average price growth, with house values increasing by 11.92% between December 2006 and December 2007.
Describing the southern capital city’s rise to the top of the market, Andrew Donnelly, CEO of Braxton Chase, says Adelaide “appeared as a curious blur on the capital growth radar early last year, before morphing into a shining star”.
“Adelaide gets a big tick for strong migration, with international students, international migrants, economic migrants and even defence force personnel on the hunt for accommodation,” Donnelly says.
And the ticks keep coming, with economic growth and investment fuelled by resources activity, and jobs growth fuelled by resources and manufacturing activity.
John Oliver, General Manager of Retail Banking at Adelaide Bank, says that if this resources boom continues, then the Australian economy is likely to remain in good shape – and, as a result, SA’s housing market should continue to grow.
“The enormous amount of new housing construction occurring in the north of Adelaide is proof of the continuing housing boom in SA,” Oliver says.
“In the longer term, if our exports to China continue to grow, South Australia can expect to see further investment and growth in the resources and mining sector. This will further boost growth in the housing industry.”
There are drivers other than resources that are pushing the SA property market forward, however, including social infrastructure and transport improvements, and urban revitalisation projects – with a stellar example being the billion-dollar rejuvenation of the Port Adelaide region.
“Adelaide has property has ‘desirable’ written all over it when it comes to property investing, and that’s not likely to change in the near future,” Donnelly says. “Investors will continue to want a piece of the action, which will keep prices moving in the right direction.”