While much of the mainstream media commentary on the property market focuses on the highs and lows of the big capital cities, it’s Australia’s smaller capital cities which have really shone in the past two years – and they continue to do so.
Adelaide, in particular, is one of those shining stars.
Overall, Adelaide is a story of continuing high sales activity and on-going price growth, remaining generally one of the strongest markets in the country.
Our recent analysis of sales volumes across Australia shows that Adelaide has a large number of suburbs with rising sales activity and there is no evidence that it will experience a downturn anytime soon – in contrast to media rhetoric about markets declining everywhere.
A few years ago, commentators discounted the Adelaide economy and its property market, because they thought it couldn’t survive the shutdown of its car manufacturing industry.
They were wrong. It caused barely a blip and Adelaide has done very well since then, as it has evolved from the old economy to the new.
Most of those former manufacturing premises have been repurposed and Adelaide has created a vibrant modern economy – including its status as the high-tech innovation capital of Australia.
It is, in effect, the Silicon Valley of Australia, with numerous national and international businesses establishing their national headquarters in Adelaide.
South Australia is the national leader on alternative energy development and Adelaide is one of the nation’s leading cities in the education and defence industries.
Against that background, Adelaide’s property market has plenty going for it.
- It has experienced a couple of years of high price growth, but remains very affordable compared to the bigger capital cities.
- The rental yields are good and rents are rising strongly, underpinned by very low vacancy rates.
- Vacancies are low elsewhere in Australia, but there is nowhere as low as Adelaide, which is almost at rock bottom with a vacancy rate of just 0.4%.
- There is not a single postcode within Adelaide where the vacancy rate is as high as 1%.
So Adelaide is a city offering great value for money, rising rents and high rental yields, underpinned by a vibrant local economy.
I believe Adelaide’s status as a leading market for price growth will continue, based on the transaction numbers which continue to be amongst the best in the nation.
Rising transaction numbers inevitably lead to price growth.
That demand is widespread across Greater Adelaide through municipalities such as Onkaparinga, Port Adelaide Enfield, Tea Tree Gully, Charles Sturt, Marion – and Playford and Salisbury in the north of the city.
As has been the case for a while, it’s the more affordable suburbs to the north of Adelaide which continue to perform extremely well.
Buyers are attracted to median house prices below $300,000 in some suburbs, yields above 6% – and good proximity to major employment zones.
So, next time you read in our shallow and sensationalist media that markets are falling across Australia, be aware that this certainly does not apply to the South Australian capital.
