Affordability is king
Reasonable prices and government development is keeping Adelaide"s property market moving along nicely.
If Darwin is the high flying achiever of the market, then Adelaide is the reliable friend, plodding along.
Residex figures showed median house values climbed by 2.16% to $ 387,500 over the three months to September. Units had a good quarter with median values jumping by 4.68% to $305,000.
The property market in South Australia slowed during the first six months of 2009, but fared better than many other States due to its defence, mining and technology industries.
"We had a bit of a flat period in 2008, which was very much to do with consumer confidence and there was a shortage of stock," says Andrew Koukourou, director of Century 21 Central. "But the last month has been a really quite strong for us - in fact, in August and September at our office in Millswood, we had two of our best months ever so we couldn"t speak highly enough of market conditions."
It comes down to reasonable pricing. "Affordability continues to drive the market," says Colliers International SA state research analyst, Katy Dean. "The interest rates might have boosted transactions slightly but I don"t think it"s changed dramatically - the overall increase in metropolitan areas is around 5% over the last year."
According to Dean, any areas near transport developments - a key proposal in Adelaide"s 30 Year Plan - are ideal for investors. "Bowden is a few kilometers from the CBD, the transport links are good and there is a huge site marked out for residential and commercial development. Mount Barker is another good investment spot due to its combination of lifestyle and accessibility."
Dean says both house and units are performing well but houses in outer suburbs are proving the most affordable. Meanwhile, the rental market is performing well in around the CBD. "The rental market is very tight in the metropolitan areas," she says. "Vacancy rates are about 2%, which is lower than the national average."
Premium end property, like everywhere else, has taken quite a battering in Adelaide. According to Herron Todd White"s October review: "The market for million dollar plus properties in inner city locations, North Adelaide, beachside suburbs and along Esplanades has been very flat of late.
"Selling periods have increased, there are a reduced number of buyers active in the market and the premium prices achieved in recent years appear to have contracted between 10-20%. At this stage it appears as though vendors are unwilling to reduce prices in order to achieve sales and are opting to hold onto properties rather than sell."
RP Data"s September report on advertised stock on the market highlights this. The report found that during that month, 3,510 new properties were listed with agents, compared with 4,124 the same period last year.