Infrastructure investment, strong overseas migration and the mining boom boost a strong market.
Adelaide ended November on a high, coming in third in the state capitals’ growth race behind Melbourne and Brisbane. Residex recorded an increase of 16.24% year on year, while growth in the three months to November was also a solid 5.12%.
Still Australia’s cheapest state, with a median house price of just $346,500 in Adelaide and $226,500 in country SA, there are plenty of opportunities for investors priced out of the expensive Perth and east coast markets.
Adelaide’s recent prosperous run has been nothing short of phenomenal, says Andrew Donnelly, CEO – Braxton Chase.
He adds that this has triggered significant investor interest in Adelaide, meaning the good times are likely to shift up several more gears during 2008. In fact Braxton Chase expects residential property prices in the City of Churches to hit full throttle by mid-year.
“South Australia is likely to be the next major beneficiary of the resources boom, receiving a generous flow of wealth from mining centres such as Roxby Downs and the Cooper Basin,” says Donnelly.
“Large scale infrastructure investment and strong overseas migration is also on an upswing, cementing Adelaide’s position as one of the darling cities for real estate growth.”
In terms of rental vacancy rates, the Real Estate Institute of SA (REISA) revealed that things had eased a little in Adelaide, standing at 1.63% for the month of November.
Vacancy rates are expected to tighten during the first quarter of 2008 however, thanks to the traditional January-March rush.
“While a rate of 1.63% still sounds low, this time last year vacancies in Adelaide were under 1% so it is quite a notable improvement on that,” said REISA president Robin Turner.
The northern suburbs have had the highest vacancy for a few months up to November, with suburbs north of North Adelaide – between Port and Payneham Roads, turning into Lower North East Road – achieving a 2.97% vacancy during this period.
This was followed by the East area – the suburbs east of the city square, between Payneham and Glen Osmond Roads, excluding the Hills area – with 1.29% vacancy.
City (all city and North Adelaide only) had 1.28%, while South (suburbs south of and bounded by South Terrace, Glen Osmond Road, ANZAC Highway, and South Road) had 1.09% vacancy.
West (suburbs west of West Terrace and South Road, and up to Port Road) had 0.41%, while the Hills area – suburbs from Crafers to Nairne – had 0% rental vacancy, making this tightest area in Adelaide – and the most appealing for investors keen to let buy and let.